There's accumulation going on in auto ancillary stocks as the entire sector is expected to do very well in the current financial year.

Many of these stocks were locked at their upper limits around mid-session on Monday - Subros (up 19.95% to Rs 48.10), Autolite (up 19.64% to Rs 6.10), Sundaram Clayton (up 9.99% to Rs 279.10), Jay Bharat (up 9.93% to Rs 37.65), Sona Koya Steering (up 9.96% to Rs 104.30), Lumax Industries (up 9.90% to Rs 33.85), Rico Auto (up 4.98% to Rs 150.85), and Amforge (up 4.91% to Rs 25.65).

Others to do amazingly well included Munjal Auto (up 15.22% to Rs 42.40), Motherson Sumi (up 14.51% to Rs 121.95), IP Rings (up 12.78% to Rs 52.50), Omax Auto (up 12.15% to Rs 40.60), Goetze (up 12.62% to Rs 30.35), Bharat Forge (up 6.28% to Rs 305.35), VDO India (up 10.36% to Rs 44.20), Gabriel (up 7.06% to Rs 103.90), Kalyani Brakes (up 7.06% to Rs 273), Sundaram Fastners (up 5.22% to Rs 422) and MICO (up 4.86% to Rs 4,640).

Last week, the Auto Ancillaries sector proved the biggest gainer in terms of rise in m-cap in percentage terms. The sector gained Rs 608.99 crore (Rs 6.08 billion) or 13.6% to Rs 5,087.96 crore (Rs 50.87 billion).

Dealers say operators are active in a huge way in auto ancillary stocks following reports that the sector may witness a substantial growth of 40-45% over the next few years. Reports that global original equipment manufacturers have plans to increase their procurement from the country, has acted as a definite positive for the entire industry. Global original equipment manufactures are expected to procure components worth $15 billion from India by 2010.

However, analysts say that the potential of this segment has been enhanced by the slowdown in the global economy. Global players are cutting costs and this should push them towards India as an outsourcing hub. But only major companies will receive orders, it is noted.

Auto ancillary companies have been faring extremely well over the last one year following the rise in demand from the domestic automobile sector (mainly from the makers of commercial vehicles and two-wheelers).