India's largest bearing manufacturer - SKF India reported 9% fall in net profit to Rs 46.67 crore on overall weak performance. The topline fell by 3% to Rs 578.01 crore. Higher raw material and other expenditure though moderated by lower traded goods cost led to 130 bps fall in operating profit margin (OPM). Thus the operating profit fell by 14% to Rs 60.02 crore.
SKF is a leading global supplier in the areas of bearings, seals, mechatronics, services and lubrication systems. 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 Limited. SKF India also has an associate company called SKF Technologies (India) Pvt. Ltd providing Sealing Solutions and Industrial Bearings. The company has manufacturing plants in Pune, Bangalore, and Haridwar.
The operating income fell by 3% to Rs 578.01 crore in June 2012 quarter. Spike in raw material costs and other expenditure and lower sales though moderated by reduced traded goods cost led to limited 130 bps crash in OPM to 10.4%. Thus the operating profit fell by 14% to Rs 60.02 crore. Raw material costs, as % to sales net stock adjusted, surged by 110 bps to 27%. Also the other expenditure grew by 210 bps to 18%. The staff cost increased by 170 bps to 8%. Only the trade goods cost crashed by whopping 410 bps to 37%.
The PBT fell by limited 9% to Rs 68.99 crore aided by healthy other income though partially offset by higher depreciation cost. The other income grew by 30% to Rs 19.72 crore while the depreciation cost rose by 12% to Rs 10.74 crore. The net profit settled with 9% fall to Rs 46.67 crore post accounting 40 bps growth in tax rate.
Half Year Performance
In half year ended June 2012, the topline fell by 5% to Rs 1161.72 crore. The OPM fell by 20 bps to 12.5% on higher raw material costs though limited by lower traded goods cost. Thus the operating profit reduced by 7% to Rs 144.80 crore. The PBT grew though by a flat 1% to Rs 168.39 crore on improved other income (by 28%) and profit on sale of fixed asset of Rs 6.26 crore (nil in June 2011 quarter) though partially offset by higher depreciation cost (up 12%). The net profit was flat at Rs 112.64 crore (against Rs 112.45 crore) on 60 bps hike in effective tax rate.
The promoters' share in the total shareholding remains unchanged at 53.6% in June 12 quarter. The promoters' have pledged 'nil' shares of the company.
The scrip closed at Rs 615, down 1.26% on BSE on 24th July 2012.
SKF India: Company Results