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News Topical, Digital Desk : The weakening of the rupee has caused turmoil in the auto sector. The biggest question is: who benefits and who loses? For companies like TVS and Bajaj Auto, whose major revenues come from exports, this decline could be an opportunity to increase earnings. Meanwhile, companies like Uno Minda may face increased cost pressures. The picture isn't entirely the same in the auto ancillary space either. Let's understand, simply, how the rupee's fall will impact the entire auto industry.
Because many auto companies derive a significant portion of their revenue from exports. When the rupee weakens against the dollar, companies convert their dollar revenue from exports into higher rupee values, resulting in higher revenue. However, for companies whose costs rely heavily on imported components, this decline becomes a costly proposition. Let's talk about auto companies... What will be the impact on TVS Motor? The impact is positive for TVS Motor. 30% of the company's volume is exported, and 25–26% of its revenue comes from abroad. Therefore, a stronger dollar yields more rupees for TVS, resulting in stronger earnings. Simply put, the more the rupee depreciates, the more TVS benefits.
How big is the gain for Bajaj Auto? Bajaj Auto is the biggest winner in this game. For the reason, 50% of the company's revenue comes from exports. In Q2FY26, dollar realization was ₹87.1. In Q3FY26, it rose to around ₹89.
The company's own estimate is that every ₹1 depreciation in the rupee translates into a ₹200 crore gain in annual EBITDA. This means that the rupee's weakness is a super positive for Bajaj Auto.
Let's talk about auto ancillaries... Samvardhana Motherson will be impacted. This impact is considered mildly positive. Reason: 60–65% of the company's revenue comes from OEMs in Europe and the US. Billings are in Euro/$—a weaker rupee means higher rupee revenue, but the company's overseas manufacturing costs are also in dollars and euros. Therefore, earnings will increase, but costs will also increase. Net Net—mildly positive.
How much did Bharat Forge benefit? This stock is among the biggest beneficiaries of the rupee's weakness. Why? 60% of the company's revenue comes from exports. Major Businesses in Contract Euro/$ Class 8 Trucks (NA) PV/EV Parts (Europe) Industrial & Defence Forgings
Impact as soon as Rupee falls Better margins on export forgings Higher profitability from US/EU orders Hence Bharat Forge's view - Major Positive.
Why is the situation reversed on Uno Minda Uno Minda incurs losses due to rupee depreciation. Because- 70%+ of its earnings come from domestic market but import dependency is high - components, parts, electronics
Impact as soon as Rupee falls Imported parts become expensive Direct pressure on margins Hence this stock comes under Negative Impact category.
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