New Delhi, June 15 (TIWN) Covid's second wave is expected to dent auto ancillaries' revenue in 1QFY22, said India Ratings and Research (Ind-Ra).

The ratings agency believes that auto ancillaries would see a materially lower revenue in 1QFY22, following a strong turnaround in 2HFY21.  "The second Covid wave leading to localised lockdowns has impacted the economic activity, resulting in shutdowns/advancement of maintenance activities at original equipment manufacturers' (OEMs) plants, causing lower volume offtake from ancillaries," it said.  Besides, the agency opined that industry will see a pent-up demand in the subsequent quarters if the lockdowns are lifted from end-June which could compensate for the loss of revenues in 1Q.  "Nevertheless, export demand remains buoyant, and could offer some respite to auto ancillaries during 1Q, as well as support revenue growth in the remaining quarters."  Ind-Ra also expects a bounce back in the aftermarket demand once the lockdowns are eased.  "However, in case, the lockdowns or restrictions remain in force for a longer duration, there could be a downside risk to Ind-Ra's revenue growth estimate of 18-20 per cent YoY for FY22."