SKFINDIA - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Rating: 4.2

🧾 Financials & Profitability Assessment

Earnings Strength

EPS: ₹114, PAT Growth: +16% QoQ (₹110 Cr → ₹203 Cr) — strong bottom-line momentum.

Zero Debt (D/E: 0.00) — pristine balance sheet; great for margin stability.

Return Metrics

ROCE: 28.8%, ROE: 21.4% — outstanding capital efficiency; among the best in manufacturing.

Dividend

Yield: 0.30% — low, but common for high-growth, asset-light manufacturers.

📊 Valuation Indicators

Metric Value Commentary

P/E Ratio 42.3 Slightly undervalued vs industry PE (49.0)

P/B Ratio ~9.21 Rich valuation; premium priced into future growth

PEG Ratio 3.32 Elevated — reflects rapid valuation expansion

RSI 49.2 Neutral zone; no imminent reversal signal

MACD 47.4 Bullish momentum building

DMA Trends Price above DMA50 & DMA200 — supports positive medium-term sentiment

Volume: Below average — accumulation likely from institutional side.

FII Holding: Slight decline (–0.66%), may reflect rebalancing, not sell-off.

52W Index Position: 59.2% — significant retracement from highs (₹5,738); valuation comfort emerging.

⚙️ Business Model & Competitive Edge

Core Business: Precision bearing manufacturing — essential to automotive, industrial, and defense.

Moat Characteristics

Technical superiority and brand reliability — premium positioning.

OEM partnerships, especially in high-end industrial applications.

Diversified revenue streams across sectors; reduced cyclicality.

Strengths

Asset-light operations with high operating leverage.

No debt; strong free cash generation capability.

Risks

Demand tied to auto/infra cycles — macro-sensitive.

Raw material cost volatility can compress margins.

📍 Investment Strategy

Ideal Entry Zone: ₹4,700–₹4,800 — close to DMA50, with supportive MACD.

Long-Term Thesis

Suited for quality-focused investors looking for predictable compounding.

Strong ROCE & debt-free status offer safety with upside.

PEG ratio suggests valuation is stretched — better to accumulate gradually.

Would you like a sectoral heatmap to compare SKF India against Schaeffler or Timken India on margin profile, price trends, and future runway? It could offer sharper clarity for long-term positioning.

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