Schaeffler India Ltd. share price target

Reported APAT at Rs 247 crore against estimate of Rs 256 crore (up 5.1% y-o-y), while EBITDA margins contracted by 40 bps y-o-y to 18.1% (against estimate of 18%).

Bottomline met expectations on a 4.7% beat in EBITDA.It is noteworthy that Scheffler continue to sustain momentum in exports as exports grew by 13.4% y-o-y and contributed 14.8% to topline in Q2CY24

Schaeffler’s Q1CY2024 performance was close to our estimates on account of a sharp improvement in export revenue and healthy gross margin expansion.

Merging all India businesses into listed entity: A first by an MNC Schaeffler Group announced merger of its unlisted subsidiaries i.e. INA Bearings (INA) and Luk India (LuK) into the listed subsidiary Schaeffler India (SCHFL), to form a single India wide entity. The consideration will be paid through share swap, resulting in an increase in parent company's holding to 74.1% (vs 51.3%).The transaction value is pegged at INR 62bn, valuing the combined entity at PE of 48x CY16 (32% premium to SCHFL) and EVE of 23x CY16 (8% premium to SCHFL). We believe its first time an MNC is consolidating all its business under the listed entity and the premium paid over Schaeffer India is justified as a)...

German industrial and automotive supplier Schaeffler Group has announced a merger of its Indian entities in a bid to simplify its holding structure. Schaeffler India Ltd (formerly Fag Bearings India Ltd), INA Bearings India Pvt Ltd and LuK India Pvt Ltd, have approved the draft scheme of amalgamation for the merger of INA India and LuK India into Schaeffler India As part of the merger scheme, Schaeffler India (SIL) will issue 10 equity shares to shareholders of INA India for every 65 equity shares...

FAG well placed to capitalize on economic recovery: With an up-tick in economy, aided by Indian government's industry friendly policies coupled with RBI's initiative to cut interest rates, leading to reduction in bank lending rates, manufacturing sector is feeling re-energized. As bearing being the basic requirement in manufacturing sector, FAG is well placed to capitalize on this much anticipated surge in economy.