SKF India:

© SKF India, 53% subsidiary of SKF – Sweden, is market leader in bearings in India.

© Demand for bearings has been witnessing very high growth from all user segments like automobiles, capital goods, heavy industries, railways, textiles, cement, wind power, etc.

© Focus on 5 technology platforms across bearings, seals, lubricating systems, services (including application engineering and asset management for large customers) and mechatronics (huge future going head as Indian industries go for higher degree of automation); are going to place company in very high league in tandem with global developments such that these would constitute about 20% (10% at present) of its revenues by CY 2010-2011.

© In view of some slowdown in Indian two wheelers market, Rs 150 crore Greenfield plant in Uttarakhand was delayed. However, now company expects to start the same by March 2009.

© Besides this new plant and on-going expansion at existing sites in Pune and Bangalore, company will also benefit from the new Greenfield plant being set up in Ahmedabad by the parent company SKF – Sweden to manufacture large sized bearings (hitherto imported and sold to Indian companies). SKF – India will be marketing these bearings in India.

© SKF India is aiming at doubling the size of turnover in next 4-5 years, mainly from accelerated growth coming from other technology platforms referred above. For this purpose, company will be spending capex of Rs 100 crore every 18 months for up-gradation and capacity expansion of existing plants. Besides, it may also go for acquisitions giving new markets, new technologies and new products, especially in the newer technology platforms. These aggressive investment plans would be funded thru internal accruals (has cash in hand of Rs 236 crore as on Dec. 31, 2007).

For Q1 CY 2008, company has put up subdued performance. Net Sales grew @ 9% to Rs.392.1 crore. However, OPM% declined to 15.1% on back of spurt in steel prices – major component of raw materials. Interest income was higher at Rs.4.37 crore. Higher sales coupled with rise in interest income led to 3% increase in PAT to Rs.37.76 crore. In Q1 CY07, company had earned higher contribution on trading of imported bearings as it had not passed on reduction of customs duty to customers as a result of strong demand and thus got higher price.