SKF India Q3FY17: Fundamental Analysis - Firstcall India Equity

Firstcall India Equity | May 24, 2016, midnight


SYNOPSIS

  • SKF India Ltd is a leading global supplier of bearings, seals, mechatronics, lubrication systems, and services which include technical support, maintenance and reliability services, engineering consulting and training.
  • The company achieved a turnover of Rs.7151.00 mn for Q3 FY17 as against Rs.6577.50 mn in Q3 FY16, up by 8.72%.
  • During the 3rd quarter, net profit increased by 16.14% to Rs.653.40 mn from Rs.562.60 mn in the corresponding quarter ending of previous year.
  • During the 3rd quarter, EBIDTA stood at Rs. 1136.80 mn as against Rs. 1004.10 mn in the corresponding period of the previous year.
  • Profit before tax (PBT) stood at Rs.1017.60 mn in Q3 FY17 as against Rs.874.70 mn in the corresponding quarter of the previous year, up by 16.34%.
  • During 9M FY17, net sales of the company increased to Rs. 2130860 mn from Rs. 19714.60 mn in 9M FY16, up by 11.13%.
  • EPS of the company stood at Rs.12.39 in Q3 FY17 against Rs. 10.67 in the corresponding quarter of the previous year.
  • Net Sales and PAT of the company are expected to grow at a CAGR of 8% and 14% over 2015 to 2018E, respectively.


OUTLOOK AND CONCLUSION

  • At the current market price of Rs. 1457.60, the stock P/E ratio is at 30.82 x FY17E and 27.46 x FY18E respectively.
  • Earning per share (EPS) of the company for the earnings for FY17E and FY18E is seen at Rs. 47.29 and Rs. 53.09 respectively.
  • Net Sales and PAT of the company are expected to grow at a CAGR of 8% and 14% over 2014 to 2018E respectively.
  • On the basis of EV/EBITDA, the stock trades at 16.08 x for FY17E and 14.44 x for FY18E.
  • Price to Book Value of the stock is expected to be at 4.23 x and 3.66 x for FY17E and FY18E respectively.
  • Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.

 

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