2 weeks ago
FIIs and DIIs Chase Two Premium Auto-Component Stocks
Two companies that make parts for vehicles are attracting large investors.
These investors include foreign institutions, called FIIs, and Indian institutions, called DIIs.
NRB Bearings makes bearings and other components that can be used in regular cars, hybrids and electric vehicles.
It is also expanding into industrial equipment, aerospace and defence.
Craftsman Automation makes engine, transmission and aluminium parts and is building new factories.
Both companies reported strong increases in sales and profits during the quarter.
However, their shares already cost more than those of many similar companies.
This means their future projects must perform well for investors to earn good returns.
FIIs and DIIs increased their combined holdings in NRB Bearings and Craftsman Automation during Q1FY27.
NRB Bearings attracted institutional buying as it expands across EV, conventional vehicle, industrial, aerospace and defence applications.
NRB reported Q1FY27 revenue of Rs 370 crore and profit after tax of Rs 38 crore.
Craftsman Automation is investing Rs 1,500 crore in capacity expansion, including a new Hosur high-pressure die-casting facility.
Both stocks trade above industry median price-earnings valuations, creating execution and return risks despite strong growth prospects.
- Who
- Foreign Institutional Investors and Domestic Institutional Investors increased stakes in NRB Bearings Limited and Craftsman Automation Limited.
- What
- Institutional investors bought shares in two auto-component companies during the April-June 2026 quarter.
- Where
- The companies operate in India's automobile-component industry, with Craftsman developing a new facility at Hosur.
- When
- The stake increases occurred in Q1FY27, covering April-June 2026; NRB's acquisition of Mahant Tool Room was reported in July 2026.
- Why
- Investors may be responding to the companies' growth plans, diversification, new orders, capacity expansion and exposure to multiple vehicle technologies.
Growth Case
Valuation and Execution Risks
Diversification
Growth Case
NRB's products can serve internal-combustion, hybrid and electric vehicles, while its industrial, aerospace and defence activities provide additional growth avenues.
Valuation and Execution Risks
Diversification plans will need to be implemented successfully, and the article does not establish that these newer businesses will deliver sustained returns.
Capacity and orders
Growth Case
Craftsman's new facilities, aluminium orders and heavy-horsepower engine contracts could support substantial future revenue growth.
Valuation and Execution Risks
The projects require major capital spending and timely commissioning, creating execution risks if capacity additions or orders are delayed.
Share valuations
Growth Case
Strong recent revenue and profit growth may help justify investor interest, particularly for Craftsman's expanding businesses.
Valuation and Execution Risks
Both stocks trade at premium valuations, and NRB's PEG ratio is above its industry median; disappointing growth could limit future returns.
Key facts
- NRB institutional holdings
- FIIs raised their stake by 4.23 percentage points to 18.9%, while DIIs raised theirs by 3.79 percentage points to 13.85% in Q1FY27.
- Craftsman institutional holdings
- FIIs increased their stake by 2.09 percentage points to 17.28%, while DIIs increased theirs by 4.61 percentage points to 32.9%.
- NRB Q1FY27 performance
- Revenue rose 19.2% year over year to Rs 370 crore, while profit after tax increased 15% to Rs 38 crore.
- Craftsman Q1FY27 performance
- Revenue rose 36% year over year to Rs 2,432 crore, while profit after tax increased 116% to Rs 151 crore.
- NRB valuation
- NRB traded at a price-earnings ratio of 31.4x versus an industry median of 29.7x, with a PEG ratio of 2.4x.
- Craftsman valuation
- Craftsman traded at a price-earnings ratio of 60.8x versus an industry median of 30.4x, with a PEG ratio of 0.9x.
- Craftsman expansion
- The company has Rs 1,500 crore of capital expenditure underway, including a phased high-pressure die-casting facility at Hosur.
Sources
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