Bearing sector is witnessing rising cost on the one hand and increasing dumping, especially from China on the other. Also, counterfeit bearing products account for nearly 20 to 30% of the bearings sold in the replacement market. The Indian bearing industry can be broadly divided into automotive and industrial segments. Automobiles constitute the single largest user industry of the bearings sector. In both auto and Industrial segment, bearing sector supplies to both OEMs (Original Equipment Manufacturers) and Replacement market (After market).

NRB Bearings indicated that OEMs account for 65% - 70% of the demand while the rest is supplied to the Aftermarket (18% - 20%) and Exports. The domestic ball and roller bearings industry has till recently focused on small and medium diameter range bearings consumed by large volume industries like Automotive, Engineering, Power transmission, Renewable Energy, Railways etc. Now the industry is intensifying focus on large size bearings in their manufacturing plans to capitalize on growing demand for such bearings.

The automotive market mainly uses taper roller bearings, deep groove ball bearings and hub bearing units. Bearings find application in industrial segment in off highway vehicles, industrial drives, energy, railways, metal, mining, pulp & paper and cement etc. Industrial segment use spherical roller bearings, cylindrical roller bearings, slewing bearings, etc.

SKF India reported 8% rise in net profit to Rs 65.97 crore on 8% fall in net sales to Rs 580.35 crore, 42% rise in other operating income to Rs 6.76 crore and 266% surge in other income to Rs 10.90 crore. Other income included profit on sale of fixed assets used in the business of textile machinery components amounting to Rs 6.26 crore during this period. So, at PBT before EO level, the company reported mere 2% increase to Rs 93.14 crore during this period.

Fag bearings reported 8% increase in net profit to Rs 46.31 crore on 17% rise in sales to Rs 360.10 crore, 75% rise in other operating income to Rs 3.20 crore and 59% rise in other income to Rs 11.27 crore.

Timken India reported 22% fall in profits to Rs 18.01 crore on 4% increase in sales to Rs 170.99 crore, 38% improvement in other operating income to Rs 1.88 crore and 63% spike in other income to Rs 6.58 crore in the quarter ended March 2012. US-based Timken Company, a major manufacturer and supplier of bearings, alloy steel, power transmission components etc, currently holds 80.02% in Timken India as of March 2012.

Automobile sector recorded nearly 14% growth in production, including 20% increase in production in commercial vehicles in FY 2011-12. But the growth decelerated sharply to mere 8.2% growth in auto production in April-May 2012, with 1.3% fall in commercial vehicle production. The current fiscal is set to witness deceleration in the pace of growth in auto sector. On a relative basis, the demand from OEM is sluggish, but the demand growth is better in the high margin replacement market. However, the replacement market is dominated by small and medium enterprises, and also sharp acceleration in the pace of imports. In this regard, the sharp depreciation of Indian rupee in the recent times has marginally dented the competitiveness of Chinese players in the domestic replacement market, which augurs well for the domestic players.