The 50% US tariffs announced in August affected several Indian sectors, including textiles, pharmaceuticals, and auto ancillaries. Ratings agency ICRA estimates these tariffs could impact about 8% of India’s total auto component production. Yet, despite this development, several auto component stocks have continued their cyclical rally, reaching all-time highs.Among them was Bosch India, the country’s largest auto ancillary stock by market cap (Rs 1.17 lakh crore), and Endurance Technologies, both of which outperformed peers like ZF Commercial Vehicle Control System India.Fig 1: Stock Price of Bosch India and its Peers from 2023 to September 2025 Source: Trading ViewBosch India stock surged 58% in 5 months (April 9 and September 10, 2025) to make a new high of Rs 41,945 on 10 September, while Endurance Technologies stock jumped 64% to make a new high of Rs 3,079.9 on 9 September. They outperformed ZF Commercial Vehicle Control System India, which rose ~14%. Interestingly, in 2023, ZF stock (79%) outperformed Bosch India (29%) and Endurance (38%).Bosch India surged 58% in five months (April 9-September 10, 2025) to hit a new peak of Rs 41,945. Endurance Technologies jumped 64% to Rs 3,079.9 by September 9. ZF Commercial, by contrast, rose just ~14% during the same period, though it had outperformed peers in 2023.This raises the question: what drove Bosch India and Endurance’s outperformance?Regulatory reforms: The key growth driverThe Indian auto component industry is significantly shaped by government regulations on safety and emissions. These norms require automakers and owners to make hardware and software changes to their vehicles, creating an opportunity for auto component makers.Story continues below this adZF Commercial benefited in 2023 from the rollout of Electronic Stability Control (ESC) requirements for buses, boosting its original equipment sales by 16%. Its next growth opportunity is the mandatory inclusion of Advanced Driver Assistance Systems (ADAS) in buses and trucks, beginning April 2026 for new models and October 2026 for existing ones.Endurance Technologies and Bosch India are positioned to benefit from upcoming rules mandating anti-lock braking systems (ABS) for all new two-wheelers from January 1, 2026, regardless of engine size. ICICI Securities estimates this creates a Rs 3,000-6,000 crore annual market.In addition, a strong monsoon is expected to lift rural demand for two-wheelers (2Ws), where both companies enjoy leadership positions. Bosch India even expects 2W production to surpass its FY19 peak.Fig 2: Bosch India’s Automotive Market Production Outlook Source: Bosch India Q1 FY26 Investor Presentation Bosch India’s key growth driversStory continues below this adBosch India generates nearly 90% of profits from its mobility business, with power solutions — injectors, pumps, sensors, ignition systems, and exhaust-gas treatments — contributing to nearly 80% of revenue. These are directly impacted by Bharat Stage (BS) emission norms.Fig 3: Bosch India’s Q1FY26 Sales Performance Source: Bosch India Q1 FY26 Investor Presentation In 2000, the government started implementing BS norms to control emissions, and implemented BS2, BS3, and BS4 norms by April 2017. BS5 norms were to be implemented on April 1, 2020, and BS6 from 2024. However, the government directly jumped to BS6 emission norms to minimise nitrogen oxides (NOx) and particulate matter (PM) pollutants, which are high in diesel engines.This was disruptive for Bosch India, which had a market leadership in diesel engines. To comply with BS6, diesel engines had to add electronic components that increased the cost by up to Rs 1.5 lakh, depending on the engine size. Bosch can’t completely shift to petrol either, as Corporate Average Fuel Efficiency (CAFE) norms enforced from April 2017 required lower CO2 emissions, which was possible with diesel engines.Story continues below this adWith India’s electronics supply chain underdeveloped, reliance on imports drove up material costs and eroded Bosch’s CV fuel-injection market share. Its stock fell 40% between July 2017 and February 2020, excluding the impact of the pandemic. Its revenue fell 23% in the fiscal year ended March 2020.Fig 4: Bosch India’s Revenue and EPS from FY17-FY21 Source: Screener.inHowever, the post-pandemic era changed the auto component landscape with the Make in India initiative encouraging localisation to reduce dependence on imports.Bosch India’s earnings and future growth potentialThe fast-changing regulatory landscape called for Bosch India to diversify its portfolio to cater to multiple powertrains, from diesel to CNG to hybrids, commercial vehicles to 2W. A quick look at the company’s earnings shows how diversification and regulatory norms are shaping Bosch India’s revenue.Fig 5: Bosch India’s Revenue from FY22-FY25Story continues below this ad Source: Screener.inIn Q1FY26, diesel components demand from off-highway and passenger vehicles drove Bosch India’s power solutions revenue. The implementation of the onboard diagnostics 2 norms from April 1, 2025, drove sales for exhaust gas sensors among two-wheelers, and filters, lubricants, and wiper systems were the most purchased items in the mobility aftermarket. Most of the company’s revenue is still hardware-focused.The company is now adapting to the two transformative trends of electrification and regulatory convergence of BS norms and Euro emission standards. It has shifted from innovating everything in-house to partnering with local channel partners and startups to reduce time-to-market in the high-volume, high-growth market of India.Today, Bosch offers solutions around battery packs, battery management systems, vehicle control units, and thermal management. It supplies critical components for Bajaj Chetak, TVS iQube scooters, and Tata Nexon EV.Bosch India is working on a customised cost-effective ADAS for real-world Indian road behaviour to tap the upcoming regulatory norms around ADAS for commercial vehicles. It is also looking to tap into the EV and premiumisation trend. These trends could drive Bosch India’s earnings in the medium term. As for the short term, the GST reforms, interest rate cuts, and an increase in non-taxable income to Rs 12 lakh could drive automotive sales.Story continues below this adIs Bosch India stock a buy at its current high?Bosch India is fundamentally strong and back to double-digit growth, but valuation is a concern.The stock is trading at a 52.9x price-to-earnings (P/E) ratio, above its 10-year median of 40.0x and higher than Endurance Technologies (47.7x). The high P/E ratio is a result of 18% profit CAGR (compounded annual growth rate) in the last three years. However, looking at the last 10-year data, the stock’s upside was limited when it traded above a 50x P/E ratio. With the stock at an all-time high, significant further upside looks unlikely unless new value is unlocked.Fig 6: Bosch India’s 10-year PE ratio Source: Screener.inUnlocking valueStory continues below this adRestructuring could be the next big catalyst. A recent example is Gabriel India, which consolidated its international parent Asia Investments Private Limited’s undertaking in Anchemco India and equity holdings in Dana Anand India, Henkel ANAND India, and ANAND CY Myutec Automotive, expanding its portfolio and unlocking shareholder value. The stock has surged 117% since the restructuring announcement in June 2025.Fig 7: Gabriel India Stock Price Momentum 2024 to Date Source: Trading ViewA similar scenario could unfold for Bosch India.German private company Robert Bosch GmbH operates in India through several private companies, which are not a part of the listed company Bosch India. For instance, ABS is manufactured by Bosch Chassis Systems, which has Rs 4,000 annual revenue that grew at 18% CAGR in the FY19-25 period. The German company manufactures vehicle control units (VCUs) and EV cooling pumps in India through Bosch Automotive Electronics with similar revenue. Neither companies is a part of the listed entity, Bosch India. Their revenues do not benefit Bosch India shareholders.If consolidated, these businesses could significantly enhance Bosch India’s valuation. Bosch regularly undertakes restructuring, though it has made no official statement yet.ConclusionStory continues below this adBosch India is an integrated player in the Indian and global automotive landscape. It is growing in the Indian market through innovation and partnership, customising its solutions for Indian roads. While its fundamentals are strong, it remains to be seen how the company taps India’s electrification opportunity and captures market share.Note: We have relied on data from http://www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.Puja Tayal is a financial writer with over 17 years of experience in the field of fundamental research.Disclosure: The writer and his dependents do not hold the stocks discussed in this article.The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. 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