SKF reported a strong Q4FY21 performance, which was broadly in line with our estimates for the quarter. Sequentially, the margin profile seems to have cooled off (base being exceptionally high) but they still remain buoyant with respect to the larger picture. The company also announced a final dividend...

The auto segment has been revving up with festive uptick and pent up demand. However, in the last media interaction the management shared that the industrial segment was still lagging. Nevertheless, they expect Industrial to make a comeback in CY21. Overall, we expect FY21 to be at arm's length of FY20. From there on we expect SKF to post revenue, EBDTA & PAT CAGR...

The auto segment is expected to keep up the ongoing momentum as PVs witnessed double digit growth in Q2. Further, SKF witnessed market share gains coupled with double digit growth in cars, trucks, 2-W & distribution segments led by pre-stocking demand for festive season. On the industrial side, infra linked segments like cement, metals, construction equipment are gaining traction whereas wind is sluggish on account of increase in prices & ceased capex by large players. Meanwhile, railway segment maintained its strong traction with SKF making progress in freight segment bearings....

SKF India reported dismal numbers for Q1FY21 as manufacturing activities were disrupted across the value chain. Tracking this, production was halted for more than 50 days at SKF. June saw some green shoots but it was shortlived on account of regional lockdowns. Revenue for the quarter was at | 301.2 crore, down 61.2% YoY (vs. I-direct estimate of | 351 crore). During the quarter, SKF won some significant orders for rotating equipment performance offerings. Performance for the quarter reflects production loss of more than 50 days. Gross margins stayed stable at 39% vs. 39.7% YoY. However, negative operating impaired the operating performance, as SKF...

SKF reported a weak set of Q4FY20 numbers, which were below our estimates. However, higher other income provided a much needed cushion to the bottomline. SKF registered a revenue decline of 18.5% YoY at | 610.2 crore (vs. I-direct estimate of | 674.6 crore) primarily due to sluggish demand from the auto sector. EBITDA margins contracted ~470 bps YoY to 10.1% on the back of a decline in gross margins by ~290 bps. On the expenses side, employee cost declined 7.8% YoY to | 58.1 crore while other expenses registered a decline of 15.4% to | 110.4 crore. Absolute EBITDA declined...

Companies like Larsen & Toubro and KEC with exposure to the Middle East and North Africa (MENA) region are expected to get impacted by the recent more than 60% fall in crude oil prices to US$22/barrel. This is expected to impact overall orders/awarding from the MENA region. Companies like Elgi Equipments, AIA Engineering, Thermax, Engineers India and Kalpataru Power with exposure to international geographies like Europe, Middle East, China for sales or essential raw material may get impacted. However, lockdowns in India, UK, Europe and other geographies due to Covid-19 are...

Exports cushion revenue decline as other segments decline Exports for the quarter grew 84% YoY while the share of the same was at 14% of total revenues. In other words, rise in exports was a counter move to utilise capacity and arrest revenue decline in the domestic market and cover fixed overheads. Overall revenues declined 3% YoY. In terms of segments, slowdown in auto sector impacted the segment wherein revenues fell 20% for Q2FY20 while industrial segment revenues declined 1%. Going ahead, we expect growth to hinge on the magnitude and timing...

Sluggish auto performance, industrial segment holds promise For Q1FY20, the topline grew muted 2.9% YoY due to subdued performance from the auto segment. Auto contributed 47% to the topline (including exports contribution of 9%). On the flip side, the industrial segment contributed 53% to the topline led by a pick-up in wind energy, railways, heavy industry, construction and cement industry. The key highlight from the management has been a pickup in the infrastructure driven capital investments across the infrastructure space indicating continued growth in...

Revenues grew a muted 6.4% YoY due to subdued performance of the auto segment. Auto contributed 48% to the topline (including exports contribution of 5%). On the flip side, industrial segment contributed 52% to the topline led by a pick-up in railways, wind energy, heavy industry, construction and cement industry. The management has also indicated at continued growth in the industrial segment led by sectors like off highway, steel, metals, renewables, etc. For Q4FY19, railways contributed 7% to topline (up 25% YoY) led by...

New Products & Railways Opportunity: Q3FY19 results came in line with our estimates. YoY revenue grew by 9.6% aided by growth in industrial vertical (20%), mainly from construction equipment segment which was slightly negated by subdued performance from automotive segment.

ICICI Securities Ltd | Retail Equity Research SKF India (SKF) reported weak Q3FY19 results, which were below our estimates. Revenues grew 9.6% YoY to | 767.7 crore. We expected revenue of | 774 crore for the quarter EBITDA margins came in at 15.8% vs. 17.6% YoY. Lower margins were on account of lower gross margins (down 190 bps YoY) and higher proportion of (low margin) traded goods during the quarter. Traded goods as a percentage of topline increased to 37.8% vs....

New Products & Railways Opportunity: Q2FY19 results came in line with our estimates and earnings for Q2FY19 grew by 14.0% YoY due to improved volumes from automotive segment.

ICICI Securities Ltd | Retail Equity Research SKF India (SKF) reported healthy Q2FY19 results that were broadly in line with our estimates. Revenues grew 12.7% YoY at | 766 crore. We expected revenue of | 769.1 crore for the quarter. EBITDA margins came in at 16% vs. 16.3% YoY. Lower margins were on account of lower gross margins and higher proportion of (low margin) traded goods during the quarter. Gross margins declined ~80 bps YoY. Traded goods as % of topline increased to 31.5% vs....

Railway Segment to Drive Growth Ahead: Earnings for Q1FY19 grew by a 25.8% YoY owing to improved volumes and YoY EBITDA margin expansion of 133 bps. YoY revenue grew by 13.3% accompanied by an EBITDA growth of 24%.

EBITDA grew 24% YoY to | 116 crore (our estimate: | 113 crore). This was due to gross margin expansion of 70 bps YoY. Higher margins were despite higher proportion of traded goods for the quarter. We believe higher margins were on account of improving utilisation. Employee expenses grew muted at 5.8% YoY. Accordingly, EBITDA margins came in at 15.4% (14% in Q1FY18, 15.1% in Q4FY18). We expected margins of 15.1% for the quarter PAT came in at | 80.9 crore, up 25.8% YoY primarily due to higher...

EBITDA grew 33.5% YoY to | 106.1 crore. This was due to gross margin expansion of 400 bps YoY. Higher margins were mostly on account of low base effect (higher proportion of traded goods in Q4FY17). Other expenses witnessed a steep jump of 13.7% YoY for...

Full year FY18 EPS grew by 23.9% on the back of an EBITDA margin expansion(300 bps) due to stable expenses coupled with a revenue growth of 4.5% on account of improved volumes especially in tractors, 2 wheelers followed by truck segment.

Railway Segment to Drive Growth Ahead:QoQ EPS grew by 16.5% amid marginal revenue growth of 3.0% aided by EBITDAexpansion of 122 bps. We expect the top line to grow at 6.0% CAGR duringFY17-FY20E; however the EBITDA margin may stabilize at 17% levels with PATmargin stabilizing at 12.3% by FY20E owing to cost rationalization and change in product mix favoring high margin business.

ICICI Securities Ltd | Retail Equity Research SKF India (SKF) reported strong Q3FY18 results, which were above our estimates on the operational front Revenues grew 9.5% YoY to | 700.5 crore (vs. reported growth of...

ICICI Securities Ltd | Retail Equity Research SKF is the leader in the Indian bearing market with ~28% share. We believe the company is stepping on the growth trajectory due to traction in its key segments, auto and industrial. SKF derives ~54% sales from the automotive segment and ~46% of sales from the industrial segment. In the auto segment, the company is witnessing improved demand in HUB-3 bearings with the Indian auto industry moving from first generation bearing to third generation bearing. With a pick-up in auto sales, we...