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SKF India Ltd. Stock Analysis

Mid Cap
Evaluated by 2048 users | BSE: 500472 | NSE: SKFINDIA |
Bearings
SKF India is a part of the SKF Group, a leading global supplier of rolling bearing and seals. Along with a varied range of products, it also offers extensive solutions and services in this area. Over the last century, SKF has grown from being a bearings manufacturer to being a...
1. Right Stock
Very Good
2. Right Price
3. Right Time

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
SKF India Ltd. has performed well in majority of the past ten years indicating its past ten year financial track record is very good
Value Creation
Value Creation Index Colour Code Guide
 Dec'10Dec'11Dec'12Dec'13Dec'14Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 22.38%22.46%17.17%14.98%15.05%16.05%13.39%16.33%18.11%15.28%
Value Creation Index 0.380.280.13-0.01-0.010.220.020.24NA0.16
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 2,0682,4352,2282,2752,4142,3982,6312,7503,0352,842
Y-o-Y Gr. Rt.-17.7%-8.5%2.1%6.1%-0.7%9.7%4.5%10.3%-6.4%
Adjusted EPS (Rs.) 33.0739.6135.2834.5338.4138.345.3859.2466.955.75
Y-o-Y Gr. Rt.-19.8%-10.9%-2.1%11.2%-0.3%18.5%30.5%12.9%-16.7%
Book Value per Share (Rs.) 160.95191.78219.11241.89268.57252.55343.49357.87343.23385.37
Adjusted Net Profit 174209186182203202239304330275
Net Op. Cash Flow (Rs. Cr.) 11515219912221820.9115367181330
Debt to Cash Flow from Ops 000002.480.30.230.50
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
SKF India Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 3.6%3.3%2.6%-6.4%
Adjusted EPS 6%7.7%7.1%-16.7%
Book Value per Share 10.27.53.912.3
Share Price 11.3% 5.3% -2.6% -26.8%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Dec'10Dec'11Dec'12Dec'13Dec'14Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 22.3122.4617.1714.9815.0516.3913.7716.6718.715.29
Operating Profit Margin (%) 12.1212.2611.611.4811.6512.0612.7716.2516.0112.85
Net Profit Margin (%) 8.438.588.3588.398.429.0911.0610.899.69
Debt to Equity 000000.040.020.050.050
Working Capital Days 107119138135136119150157149162
Cash Conversion Cycle 14263436363863595761
Corporate Governance What do we look at?
Corporate Governance
Board Credentials
Promoter's holding
Transparency
Integrity
Entity Percentage Holding
Promoters 52.58%
Institutions 34.60%
Non-Institutions 12.82%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of SKF India Ltd. and arrived at the following conclusion:

Past 10 year's financial track record indicates that SKF India Ltd. is a good quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of SKF India Ltd.'s performance infers:

SKF India Ltd. earnings have grown by 7.7%, whereas share price has appreciated 5.3% CAGR over the past five years, indicating the company's share price is likely undervalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of SKF India Ltd. share prices over the last 10 years. Here is what we found out:

SKF India Ltd. share price has appreciated 11.4% annually over the past ten years.

SKF India is a part of the SKF Group, a leading global supplier of rolling bearing and seals. Along with a varied range of products, it also offers extensive solutions and services in this area. Over the last century, SKF has grown from being a bearings manufacturer to being a systems/sub-systems and solution provider. SKF is represented in more than 130 countries and has 15,000 distributor locations worldwide. In 1997, CR Seals India. established a plant in Bangalore, which went on to

SKF India is a part of the SKF Group, a leading global supplier of rolling bearing and seals. Along with a varied range of products, it also offers extensive solutions and services in this area. Over the last century, SKF has grown from being a bearings manufacturer to being a systems/sub-systems and solution provider. SKF is represented in more than 130 countries and has 15,000 distributor locations worldwide. In 1997, CR Seals India. established a plant in Bangalore, which went on to become SKF Sealing Solutions India, now a part of SKF in India. SKF Sealing Solutions now re-christened to SKF Technologies (India), is a Rs 600 million company and serves customers in three segments, namely, automotive, industrial and bearings. SKF India is expanding its production capacities by establishing a new plant at Haridwar. 

In India, the SKF Group started trading operations in Kolkata in 1923 and since then the Group's operations have been consolidated into SKF India. The company has manufacturing plants at  Bangalore and Pune. SKF India also has an associate company called SKF Technologies (India) Pvt Ltd providing sealing solutions.

SKF India has dedicated an Application Development Center at Bangalore responsible for customizing products & services to the requirements of each client. The center was established in November 2004 and since then, has been a stalwart for the development of new products and solutions in the shortest possible time and at the lowest possible cost to to provide products and services that create customer value.

The company’s two manufacturing plants are located at Bangalore in Karnataka and Pune in Maharashtra with an installed capacity to manufacture 100.1 mn units of bearings and 3.9 mn units of textile machinery components. The company also provides services including maintenance, lubrication systems management services among others. In ‘06, bearings contributed almost 94% to the company’s revenue. The company has its presence in the US, Europe, and Asia and exports to countries in these continents. In CY06, exports contributed about 5% of revenue.

SKF India provides products, solutions and services in the areas of rolling bearings, seals, mechatronics, services and lubrications systems. The company manufactures different types of bearings, seals including roller bearings, bearing units, housings, industrial & hydraulic seals, linear motion products, high precision bearing, spindles, electrical actuators, actuation systems and rolling bearing steel which are used in cars and truck wheels.

The company’s business is divided into four groups:

  • Automotive business unit
  • Electrical business unit
  • Industrial business unit and
  • Service business unit.

SKF India's associate company, SKF Technologies (India), a wholly owned subsidiary of AB SKF, Sweden, offers customers complete sealing solutions based on its leading edge technology.

Milestones Achieved

  • 2012 SKF launches new seal head unit for shock absorbers for off-road vehicles
  •          Award-winning project incorporates SKF’s S2M magnetic bearings to increase reliability in seabed gas compression system
  •           SKF launches the SKF Low Friction Hub Bearing Unit, an energy efficient wheel end for cars.
  •           SKF celebrates 65 Years with Scuderia Ferrari'
  • 2010 - SKF inaugurated a new factory in Haridwar
  • 2008-SKF India received the Dun & Bradstreet American Express Corporate Award for the Top Indian Company in the Bearings Sector.
  • 2007-SKF India received Auto Monitor Award for the 'Green Manufacturer of the Year.'  The company won 'Autofit Rolling Trophy' at the 4th National Convention on Six Sigma organized by Confederation of Indian Industries (CII).
  • 2006-SKF India received Dun & Bradstreet American Express Corporate Award for the Top Indian Company in the Bearings Sector.
  • 2004-SKF India acquired Vibration Engineer and Consultants. SKF Application Development Center was inaugurated
  • 2002-SKF became the first bearing company in India to secure ISO/TS-16949 for the Automotive Business Unit. Establishment of the SKF Center for Learning was achieved.
  • 1997-CR Seals India established a plant in Bangalore; Began world Class Upgradation of Pune plant with an investment of Rs130 crore.
  • 1989-Launched a state-of- the art factory for SDGBB in Bangalore
  • 1965-Production begain in the first factory at Chinchwad, Pune
  • 1961-The 'Associated Bearing Company.' was incorporated
  • 1923-Began trading operations in Calcutta

Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323

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