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Result Review
FAG Bearings – 4QCY2010
FAG Bearings reported strong 4QCY2010 performance. Net sales during the quarter grew
by strong 21.5% yoy to `266cr (`219cr), slightly lower than our expectation of `280cr.
Revenue performance was largely driven by a substantial jump in volumes, aided by strong
growth in overall auto volumes and the industrial bearings segment. EBITDA margin
expanded significantly by 721bp yoy to 19.6% (v/s 18.9% est.) basically due to the 105bp
decline in raw-material costs and a 705bp decline in purchase of traded goods. Robust topline
growth and improvement in operating performance resulted in impressive 105% yoy
growth in net profit to `34cr (`16cr). Moreover, higher other income and lower tax outgo
aided in reporting better-than-expected numbers on the bottom-line front.
At `841, the stock is trading at attractive valuations of 11x and 9.7x CY2011E and CY2012E
earnings, respectively. We maintain our Buy rating on the stock; however, the target price is
under review.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Result Review
FAG Bearings – 4QCY2010
FAG Bearings reported strong 4QCY2010 performance. Net sales during the quarter grew
by strong 21.5% yoy to `266cr (`219cr), slightly lower than our expectation of `280cr.
Revenue performance was largely driven by a substantial jump in volumes, aided by strong
growth in overall auto volumes and the industrial bearings segment. EBITDA margin
expanded significantly by 721bp yoy to 19.6% (v/s 18.9% est.) basically due to the 105bp
decline in raw-material costs and a 705bp decline in purchase of traded goods. Robust topline
growth and improvement in operating performance resulted in impressive 105% yoy
growth in net profit to `34cr (`16cr). Moreover, higher other income and lower tax outgo
aided in reporting better-than-expected numbers on the bottom-line front.
At `841, the stock is trading at attractive valuations of 11x and 9.7x CY2011E and CY2012E
earnings, respectively. We maintain our Buy rating on the stock; however, the target price is
under review.
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