Should you consider ancillary stocks amid demand and valuation concerns in auto sector?

In Q1FY25, diversified auto ancillaries outperformed OEMs with 23% YoY revenue growth and 29% YoY EBITDA increase, compared to OEMs' 9% revenue and 21% EBITDA growth. Their focus on EVs, strong order books, and export exposure could mitigate headwinds faced by OEMs, such as rising inventory and weakening demand.