For the quarter ended December 2005, the aggregate sales of 6 Bearings companies stood at Rs 192 crore, which was 4% lower as compared to corresponding previous quarter last year. The OPM (Operating Profit Margin) slipped by 390 basis points to 17.7%. The resultant aggregate Operating profit for the quarter ended Dec’05 stood at Rs 34 crore, which was 15% lower as compared to corresponding previous quarter last year.

The aggregate other Income remained flat at Rs 7 crore. The ensuing aggregate PBT for the quarter ended December 2005 stood at Rs 31 crore, which was 18% lower when compared with corresponding previous quarter last year.

For the quarter ended December 2005 the aggregate tax liability declined 15% to Rs 11 crore, resulting in an aggregate Net profit of Rs 20 crore, which was 20% lower as compared to the corresponding previous quarter last year.

Fall in roller bearing prices

For the quarter ended December 2005 the aggregate OPM of the bearings industry slipped by 390 basis points. One of the reasons for the drop in Aggregate OPM was the fall in roller bearings prices. As per WPI, for the quarter ended December 2005 the average roller bearings prices were 9% lower on Y-o-Y basis.

As there was a fall in seen in roller bearings prices the prices of ball bearings remained firm. The average ball bearings prices for the quarter ended December 2005 were 1% higher on Y-o-Y basis. The ball bearings are extensively used in the automobile Industry. Hence as a result on account of demand from Automobile Industry the ball bearings prices were able to remain firm. However flat growth seen in ball bearings prices was not able to compensate for the fall in roller bearings prices. Nevertheless, the fall in Aggregate OPM was restricted partly due on account of fall soft steel prices.

Outlook

The mediocre performance of bearings companies for the quarter ended December 2005 was primarily on account of the steep fall seen in the roller bearings prices. Eventhough the softening steel prices limited the fall in OPM, the Aggregate Operating profit and Net profit for the quarter ended December 2005 was 15% and 20% lower when compared with December 2004 figures. However the Ball bearings manufacturers are relatively better placed since the prices have remained firm and are expected benefit significantly on account of cool down in steel prices.