FIIs & DIIs Boost Auto-Ancillary Stocks: NRB Bearings, Craftsman Automation

Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) notably raised their stakes in auto-component firms NRB Bearings Limited and Craftsman Automation during the April-June 2026 quarter.

This institutional surge comes despite both companies trading at premium valuations, signaling investor confidence in their future growth within India’s expanding auto-ancillary sector. Their strategic diversification and robust performance are key drivers behind this interest.

NRB Bearings: Diversifying Beyond Traditional Offerings

NRB Bearings, historically a needle roller bearing manufacturer, is strategically moving into higher-value applications. The company’s approach is notably EV-agnostic, ensuring product applicability across diverse vehicle types.

Key Strategic Shifts for NRB Bearings:

• Venturing into higher-value automotive applications, electrification, robotics, and heavy construction equipment.
• Products apply to internal combustion engine (ICE), electric, and hybrid models.
• Expanding its industrial business.
• Entered the aerospace and defense sector via the Mahant Tool Room acquisition, securing orders for Sukhoi-30 applications.

NRB Bearings: Q1FY27 Performance

The company posted solid financial results for the first quarter of fiscal year 2027.

• Revenue increased by 19.2% year-over-year to Rs 370 crore.
• Profit after tax rose by 15% to Rs 38 crore.

Craftsman Automation: CapEx and Engine Focus

Craftsman Automation specializes in critical engine and transmission components for commercial vehicles and tractors. The company is currently engaged in a significant capital expenditure cycle to bolster its manufacturing capabilities.

This includes a substantial Rs 1,500 crore capital expenditure, with a new facility planned in Hosur. This facility will focus on high-pressure die-casting for automotive components across two- and four-wheelers.

Craftsman Automation’s Growth Initiatives:

• Focusing on heavy-horsepower engines.
• Secured multiple orders projected to generate over $100 million in revenue by FY29.

Craftsman Automation: Q1FY27 Performance

Craftsman Automation delivered impressive financial growth during Q1FY27.

• Revenue jumped by 36% year-over-year to Rs 2,432 crore.
• Profit after tax saw a substantial 116% increase to Rs 151 crore.

Valuation and Future Outlook

Despite their strong growth trajectories and diversification efforts, both companies are trading at premium valuations compared to industry averages. This suggests that market expectations for their future performance are already high.

Current Valuations vs. Industry Median:

• NRB Bearings: Price-to-Earnings (P/E) ratio of 31.4x versus an industry median of 29.7x.
• Craftsman Automation: P/E ratio of 60.8x against an industry median of 30.4x.

Sustained revenue growth and robust returns will hinge on the successful execution of new orders, timely completion of capacity additions, and effective implementation of their diversification strategies. Investors are advised to monitor these stocks closely.