Auto components and equipment makers' shares jumped in Thursday's trading session a day after Commerce and Industry Minister Piyush Goyal said that Tesla was looking to source components from India.

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At the time of filing this report, Varroc Engineering shares traded over 3 per cent, Sandhar Technologies shares were up over 3 per cent, while Sona BLW Precision Forgings stock was up over 2 per cent.

Meanwhile, Bharat Forge shares were up over 1 per cent, Samvardhana Motherson International shares rose 0.39 per cent, and CIE Automotive India's shares were up 0.42 per cent.

On Wednesday, in an auto conference, Goyal said Tesla was looking to source components worth around $1.9 billion from India.

"Tesla already bought one billion dollars worth of components last year and this year, their target is around USD 1.7 billion or USD 1.9 billion," Goyal said.

Earlier, the government stated that it was not looking to frame a separate policy for providing incentives to Tesla, and the company can apply support measures under existing schemes like production-linked incentives (PLI) for auto and advanced chemistry cells.

The government has rolled out the PLI schemes with an outlay of Rs 18,100 crore and Rs 26,058 crore for the auto, auto-components, and drone industries.

What do analysts suggest?

"If the stock breaches the Rs 1,125 level, it can see an uptrend till Rs 1,160-Rs 1,170. Buy on dips strategy is recommended with a target of Rs 1,125 apiece and after that Rs 1,160 apiece," said Sandeep Wagle, Founder & CEO at Power My Wealth.

Zee Business Senior Research Analyst Ashish Chaturvedi has recommended buying shares of Sona BLW Precisions Forgings for a target price of Rs 595 apiece.

Axis Securities has given a buy call on CIE Automotive India for a target price of Rs 585 apiece.

"We remain confident in the company’s growth story, driven by healthy operational performance, a focus on building the EV portfolio, strong FCF generation ability, and building capacities to meet demand from Indian and EU OEMs," the brokerage said.

JM Financial has given a 'buy' on Samvardhana Motherson International for a target price of Rs 130 apiece. The brokerage is bullish on the company's global presence, including an expanding portfolio of powertrain-agnostic products and a wide customer base, which, it believes, presents a multi-year growth opportunity.

How have these auto component and equipment makers performed in the past?

In 2023 so far, individually, Varroc Engineering shares have gained over 49 per cent, Samvardhana Motherson International shares have surged over 29 per cent, Sona BLW Precision Forgings shares have gained 39 per cent, and Bharat Forge shares have climbed over 23 per cent

On the flip side, CIE Automotive India shares have declined over 5 per cent year-to-date.

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