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For the quarter the Aggregate Sales revenue of 5 companies stood at Rs 504 crore, which was 46% higher as compared with corresponding previous quarter last year. The Aggregate OPM (Operating Profit Margin) increased marginally by 60 basis points to 15.1%. The resultant Aggregate Operating profit for the quarter ended Mar’06 stood at Rs 76 crore, which was 52% higher when compared with corresponding period last year.
However the Aggregate Other Income declined by 33% to Rs 8 crore. The resultant Aggregate PBIDT for the quarter ended Mar’06 stood at Rs 84 crore, which was 35% higher when compared with corresponding previous quarter last year. The Depreciation charges for the quarter ended Mar’06 increased by 8% to Rs 14 crore resulting in a PBT of Rs 71 crore for the quarter ended Mar’06, which was 42% higher when compared with corresponding previous quarter last year. The Aggregate tax liability for the quarter ended Mar’06 stood at Rs 21 crore, while the ensuing Aggregate Net profit for the quarter ended Mar’06 stood at Rs 50 crore, indicating a rise of 56% higher when compared with corresponding previous quarter last year.
SKF India and NRB Bearings have chalked out Capacity Expansion plans
The growth in automobile production and industrial output is expected to translate in higher demand for the bearing Industry as a whole. So as to cater to the rising demand from the user Industry SKF India and NRB Bearings have chalked out capacity expansion plan. The company plans to expand its ball bearing capacity to 100 million units per year from the existing 74 million units per year and its taper roller bearing capacity to 8.5 million units per year from the existing six million units per year at a total cost of Rs110 crore. With this, the company would be in a better position to meet the growing demand for its products and consequently maintain the momentum in its earnings growth.
NRB Bearings is also embarking upon an expansion programme involving an investment outlay of Rs 100 crore. The expansion will be completed by 2007-end and will enable the company to double its needle bearings capacity and triple cylindrical rollers facility. The company has its facilities in Thane, Aurangabad, Jalna, Waluj and Hyderabad and the expansion will be taken up at all these facilities. The company plans to avail itself of around Rs 50 crore as institutional debt and meet the balance through internal accruals.
Rise in production
The domestic ball and roller bearing production witnessed healthy growth on Y-o-Y basis upto July 2005, but in the next three months there has been a fall in production. However, since then, there has been a decent recovery in the production. The ball and roller bearings production for the month Jan’06, Feb’06, Mar’06 and Apr’06 stood at 280.34 lakh tonnes, 275.05 lakh tonnes, 286.47 lakh tonnes and 283.55 lakh tonnes which was 10%, 7%, 9% and 8% respectively higher when compared with the corresponding previous year period.
Outlook
The buoyant demand from the user industries augurs very well for the bearings industry and as a result the Industry players have chalked out capacity expansion plans. The rising metal prices and increasing competition may exert some pressure on margins. However Industry players like SKF India are well placed since they are able to pass on partially the rise in input cost to the customers and cover rest through cost control measures.
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