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Russia Ukraine conflict: Here's why auto ancillaries and Dr Reddy's are in focus

videos | Feb 22, 2022 3:24 PM IST

Russia-Ukraine conflict: Here's why auto ancillaries and Dr Reddy's are in focus

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A large part of the auto ancillary universe has a very big exposure to the European markets and now because of the Russia-Ukraine tensions, there could be a hit on demand from there.

A large part of the auto ancillary universe has a very big exposure to the European markets and now because of the Russia-Ukraine tensions, there could be a hit on the demand from there.

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Players like Endurance Technologies have about a 30 percent exposure in Europe. Motherson Sumi Systems gets 30 percent of its revenues from the European markets as well. Within Europe, Motherson gets 15 percent only from the German markets.
Bharat Forge has facilities across Europe, i.e. in Germany, Sweden and France. One of the large players in the auto ancillary spaces Varroc Engineering gets 60 percent of its revenues purely from VLS, which is its European facility.
These companies have been battling higher energy prices in Europe, a semiconductor shortage as well as a fall in the European car registrations, which was down about 20 percent in the month gone by. In addition to that, now the Russia-Ukraine tensions is something that could hit demand.
Also, Dr Reddy's Laboratories is another company in the pharmaceutical space that gets about 9 percent of its revenues from the Russian markets itself and there as well there could be some pressure and that is perhaps the reason why these stocks are under pressure in the market.
For more on this, watch the video.
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For a ball-by-ball coverage of the Russia-Ukraine tensions, click here
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