Buzzword for auto is disruption; still a value play: Devang Mehta

How are you looking at the auto space right now? Is one safer in the auto ancillary space as opposed to the pure play autos or do you think we can consider the underperformers from the motown?
The buzzword in auto is disruption. There are now disruptors and there are companies which are trying to protect themselves from this disruptive tendency. The sense one gets here is everybody is trying to establish their core competence in a field where they are emerging as market leaders. For example,

is emerging as a market leader in India in terms of the EV space, whereas Maruti is still not emerging as a leader in EV, but it is already a leader in the space it operates in and is trying to retain its market share.

It has been difficult for them because of the penetration from a lot of Korean and Japanese companies but they are also trying to be there and also have joint ventures with Toyota and come back announcing something else.

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Most of these auto ancillaries and auto components companies are needed and are going to be a part of not only OEM but also the replacement market. It is a good time for a lot of other auto ancillary companies to probably penetrate into the EV space as well as the space where they were already present and a lot of innovation is getting into this.

A lot of companies are going to automate their electric engines and infrastructure. The space has just widened. Even two-wheelers are getting into electric space. Three-wheelers are also expanding. We saw Bajaj Auto’s numbers, exports were decent, the commentary was not as bad. So my sense is auto still remains a value play though whether the value is right now disruptive or whether it is going to emerge is a difficult call to take. Generally, we can stay underweight on autos but we are monitoring this space for more trends which are emerging.