FAG Bearings India manufactures ball bearings, cylindrical roller bearings and spherical roller bearings. It is a leading supplier to original equipment manufacturers (OEMs) in the automotive mechanical and electrical engineering industries, besides the Railways. FAG Bearings India’s joint venture company, FAG Roller Bearings, produces taper roller bearings at Chakan near Pune.

Quarterly Analysis

For the quarter ended Jun’07 FAG Bearings reported a 15% rise in net sales revenue to Rs 155.06 crore. However the Operating Profit Margin (OPM) Increased by 120 basis points to 22.2%. The resultant operating profit for the quarter ended Jun’07 stood at Rs 34.42 crore which was 22% higher as compared to the corresponding previous quarter last year.

The raw material cost and other expense declined as percentage of sales (net of stock adjustment) from 33.5% to 32.0% and from 18.9% to 16.9% respectively. However the cost of purchasing goods for sale and staff expense increased as percentage of sales (net of stock adjustment) from 20.1% to 21.0% and from 7.4% to 8.5% respectively.

For the quarter ended Jun’07 the other income of FAG Bearings Increased by 96% to Rs 2.55 crore. The ensuing PBIDT for the quarter ended Jun’07 stood at Rs 36.97 crore which was 25% higher as compared to the corresponding previous quarter last year.

For the quarter ended Jun’07 FAG bearings reported net interest income to the tune of Rs 0.27 crore while the Deprecation/Amortisation charges increased by 5% to Rs 4.74 crore when compared with corresponding previous quarter last year. The resultant PBT for the quarter ended Jun’07 stood at Rs 32.50 crore which was 31% higher when compared with corresponding previous quarter last year.

Tax liability for the quarter ended Jun’07 stood Rs 11.33 crore resulting in PAT before PPA of Rs 21.17 crore for the quarter ended Jun’07 as compared to Rs 15.78 crore in corresponding previous quarter last year indicating a rise of 34%. For the quarter ended Jun’07 there was no tax adjustment for earlier years (net) as against a Tax adjustment for earlier years to the tune of Rs 0.62 during the quarter ended Jun’06 resulting in a PAT after PPA to the tune of Rs 21.17 crore which was 40% higher when compared with corresponding period last year.

For the half year ended Jun’07 FAG Bearings reported a 22% jump in net sales revenue to Rs 311.83 crore. However the Operating Profit Margin (OPM) Increased marginally by 10 basis points to 22.2%. The resultant operating profit for the half year ended Jun’07 stood at Rs 69.23 crore which was 23% higher as compared to the corresponding previous quarter last year.

The raw material cost and other expense declined as percentage of sales (net of stock adjustment) from 34.1% to 31.8% and from 17.9% to 16.8% respectively. However the cost of purchasing goods for sale and staff expense increased as percentage of sales (net of stock adjustment) from 18.9% to 21.6% and from 7.7% to 7.9% respectively.

For the half year ended Jun’07 the other income of FAG Bearings Increased by 108% to Rs 5.19 crore. The ensuing PBIDT for the half year ended Jun’07 stood at Rs 74.42 crore which was 26% higher as compared to the corresponding period last year.

For the half year ended Jun’07 FAG bearings reported net interest income to the tune of Rs 0.57 crore while the Deprecation/Amortisation charges increased by 5% to Rs 9.35 crore when compared with corresponding previous quarter last year. The resultant PBT for the half year ended Jun’07 stood at Rs 65.64 crore which was 31% higher when compared with corresponding period last year.

Tax liability for the half year ended Jun’07 stood Rs 22.57 crore resulting in PAT before PPA of Rs 43.07 crore for the half year ended Jun’07 as compared to Rs 33.20 crore in corresponding previous quarter last year indicating a rise of 22%. For the half year ended Jun’07 there was tax credit for earlier years (net) of Rs 0.10 crore as against a Tax adjustment for earlier years to the tune of Rs 2.02 during the half year ended Jun’06 resulting in a PAT after PPA to the tune of Rs 43.17 crore which was 30% higher when compared with corresponding period last year.

Year end Result

For the year ended Dec’06 FAG Bearings reported a 33% jump in net sales to Rs 550.73 crore. The Operating Profit Margin increased by 290 basis points to 23.0%. The resultant operating profit for the year ended Dec’06 stood at Rs 126.83 crore which was 53% higher as compared to the corresponding period last year.

The raw material cost, staff cost and other expenditure declined as percentage of sales (net of stock adjustment) from 38.3% to 33.6%, from 8.7% to 7.4% and from 18.9% to 17.5% respectively. However the cost of purchasing goods for sale increased as percentage of sales (net of stock adjustment) from 14.3% to 19.3%.

For the year ended Dec’06 other income of FAG bearings declined by 17% to Rs 2.18 crore. The ensuing PBIDT for year ended Dec’06 stood at Rs 129.01 crore which was 51% higher as compared to the corresponding period last year.

For the year ended Dec’06 FAG bearings reported net interest expense to the tune of Rs 1.26 crore which was 47% higher when compared with corresponding period last year while the Deprecation/ Amortisation charges inclined by 9% to Rs 18.30 crore when compared with corresponding period last year. The Interest (net) for the year ended Dec’06 is after considering Interest on Income Tax liability for the prior years Rs 1.33 crore. The resultant PBT for the year ended Dec’06 stood at Rs 109.45 crore which was 62% higher when compared with corresponding period last year.

The tax liability for the year ended Dec’06 stood Rs 34.60 crore resulting in PAT before PPA of Rs 74.85 crore as compared to Rs 49.74 crore in corresponding period last year indicating a rise of 50%. During the year ended Dec’06 there was a prior period adjustment with respect to taxation adjustment for earlier years (net) to the tune of Rs 1.15 crore as a result the PAT after PPA stood at Rs 73.70 crore as against Rs 47.89 crore during the corresponding period last year indicating a rise of 54%.

Currently the stock is trading around Rs 665.0