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CRISIL SME Tracker: Uptick in output volume to benefit auto component SMEs

Among the segment drivers, the replacement market is expected to clock 6-8 per cent on-year growth, following 7 per cent rise last financial year

The 'Report of the Expert Committee on MSMEs' of 2019 (Chairman: U K Sinha) noted that most large firms deal with MSMEs on a credit basis; and given that buyers do not honour invoices on time, these firms face a financial crunch. MSMEs, on their part
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The revenue of domestic auto component manufacturers is projected to increase 8-10 per cent on-year in FY25, driven by demand from original equipment manufacturers (OEMs) and the replacement market.

Small and medium enterprises (SMEs), which account for 75-80 per cent of the industry volume and 25-30 per cent of revenue, will also see growth, albeit lower than the overall industry at 5-7 per cent, on account of the shift towards higher value and mission-critical components that are dominated by the bigger players. The pace of growth this financial year is in line  with  FY24, spurred by healthy demand

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