- 04 Nov 2022
- ICICIdirect Research
SKF POSTS BETTER NUMBERS COMPARED TO PEERS
SKFINDIA - 5084 Change: -53.30 (-1.04 %)News:
Revenue for the quarter came in at Rs 1078.3 crore (I-direct estimate of Rs 1105.9 crore), up 11.6% YoY & 2.2% QoQ. Gross margin came in at 42.3% (I-direct estimate of 40%) vs. 39.2% QoQ & 38.5% YoY. Increasing gross margins are due to better performance from domestic production and indigenisation of industrial segment. Further, EBIDTA margins came in at 19.9% vs. 16.5% YoY and 17.4% QoQ. Absolute EBIDTA came in at Rs 214.6 crore (I-direct estimate of Rs 201.3 crore), up 16.8% QoQ. Employee cost was at Rs 78.8 crore an increment of 9.1% YoY & 1.4% QoQ. Other expenses increased 15.6% YoY & 7% QoQ and were at Rs 162.5 crore. Ensuing PAT came in at Rs 155.8 crore (I-direct estimate of Rs 141.7 crore) compared to Rs 129.2 crore in Q1FY23 and Rs 117.6 crore in Q2FY22. PAT was cushioned by other income of Rs 10.2 crore. Tax rate for the quarter was at 24.9%
View:
SKF’s results were better than the other players in the bearing space. One reason was its equal presence in industrial and automotive segment. SKF has been making strides towards innovation and R&D and has made significant inroads in REP. To cater to demand from railways segment the company has got the approval of Class E and Class K bearings. It is also focusing on setting up new E-market and E-Shops to reduce counterfeit products. SKF also boasts a debt free balance sheet, coupled with consistent RoCE & RoICs upwards of 20% that make us bullish on the stock
Impact:
Positive