NRB Bearings Ltd. share price target

Healthy Revenue growth coupled with strong margins: YoY EPS grew by177% largely due to an EBITDA expansion of 844 bps and a revenue growth of 14.9%. EBITDA grew by 102% due to lower expenses. We expect the margin trend to continue in future and expect EBITDA margin to reach 21% levels along with netprofit margin reaching 12% by FY20E.

We have increased our FY18/19/20E by 15% factoring in revival in CV and export sales along with margin expansion and roll forward our TP on FY20. We value the stock Rs. 204 (20xFY20E EPS) vs 192 earlier. Maintain Buy NRB posted better-than-expected numbers in 3QFY18, on both the revenue and margin fronts. Revenue came in at Rs 2.07bn (+26% YoY), fuelled by strong growth across OEMs segments (2W, CV and tractor segment) and export. EBITDA stood at Rs 405mn (+103% YoY, 6%QoQ). EBITDA margin came in at 19.5% (+740bps YoY, +109 bps QoQ), benefitting from operating leverage and a richer product mix (higher share of Needle bearings).

NRB Bearings Revenue and Net profit surged by 25.8% and 177.8% yoy respectively. As NRB Bearings derives ~65% of its total revenue from domestic OEMs, recovery in automobile demand, largely in CVs and PVs, led to higher revenue in Q3FY18.

ICICI Securities Ltd | Retail Equity Research NRB Bearings reported stellar Q3FY18 numbers. The company reported topline, EBITDA, PAT numbers above our estimates Revenues came in at | 207.9 crore, up 25.4% YoY. We estimated revenues of | 192.1 crore (15.9% YoY growth) for the quarter EBITDA increased 103.4% YoY to | 40.5 crore. The company reported strong EBITDA on account of a sharp increase in gross margins (up 830 bps YoY). Accordingly, EBITDA margins came in at...

NRB Bearings' Revenue (growth not comparable due to change in accounting standard) and Net profit increased by 16.1% and 25.2% respectively on YoY basis. As NRB Bearings derives ~65% of its total revenue from domestic OEMs, recovery in demand in CVs and festive demand for two wheelers and PVs, led to higher revenue in Q2FY18. Also operational efficiency aided in margin expansion.

ICICI Securities Ltd | Retail Equity Research NRB Bearings reported strong Q2FY18 numbers. It reported topline, EBITDA and PAT numbers that were above our estimates Revenues came in at | 208.2 crore, up 15.9% YoY. We estimated revenues of | 201.8 crore for the quarter EBITDA increased 35.1% YoY to | 38.3 crore. The company reported strong EBITDA on account of a sharp increase in gross margins (up 630 bps YoY). Accordingly, EBITDA margins came in at 18.4% vs....

Moderate growth with healthy margin expansion: Standalone sales grew ata moderate 5.7% sequentially and 5.6% YoY to reach Rs. 2082 Mn. EBITDA has recorded an impressive 39.6% QoQ & 32.5% YoY growth due to easing material and other expenses. On QoQ basis, material expenses have eased by 31 bps while other expenses eased by 101 bps.

We roll forward our TP on Sept-19, and maintain BUY with a TP of Rs 172(22x Sept-19) vs 161 earlier. NRB posted better-than-expected numbers in 2QFY18, on both the revenue and margin fronts. Revenue came in at Rs 2.08bn (+16% YoY), fuelled by strong growth across segments like 2Ws, PVs, CVs and tractors. EBITDA stood at Rs 383mn (+33% YoY, 18% above estimates). EBITDA margin came in at 18.4% (+227bps, +308 bps QoQ), benefitting from operating leverage and a rich product mix. PAT came in at Rs 211mn (+25% YoY).

NRB Bearings' Revenue increased by 2.9%; however Net profit declined 3.2% on YoY basis. NRB Bearings derives 65% of its total revenue from domestic OEMs and was impacted by slowdown in the domestic CV industry and replacement market sales. However, it reported positive growth in PVs, tractors and two wheelers OEM sales.

ICICI Securities Ltd | Retail Equity Research NRB Bearings reported weak Q1FY18 numbers. The company reported topline, EBITDA and PAT, which were below our estimates Revenues came in at | 179.2 crore, up 2.6%YoY. We estimate revenues of | 196.1 crore for the quarter EBITDA declined 6.5% YoY to | 27.4 crore. The company reported subdued EBITDA on account of a sharp increase in other expenses. Other expenses increased to | 41.4 crore in Q1FY18 vs. | 28.9 crore...