⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
TIMKEN - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | TIMKEN | Market Cap | 22,814 Cr. | Current Price | 3,030 ₹ | High / Low | 3,576 ₹ |
| Stock P/E | 50.2 | Book Value | 368 ₹ | Dividend Yield | 1.19 % | ROCE | 20.9 % |
| ROE | 17.0 % | Face Value | 10.0 ₹ | DMA 50 | 3,026 ₹ | DMA 200 | 3,057 ₹ |
| Chg in FII Hold | -0.45 % | Chg in DII Hold | 0.43 % | PAT Qtr | 89.5 Cr. | PAT Prev Qtr | 104 Cr. |
| RSI | 52.1 | MACD | -14.6 | Volume | 65,983 | Avg Vol 1Wk | 49,330 |
| Low price | 2,200 ₹ | High price | 3,576 ₹ | PEG Ratio | 4.61 | Debt to equity | 0.01 |
| 52w Index | 60.4 % | Qtr Profit Var | -0.53 % | EPS | 60.5 ₹ | Industry PE | 47.4 |
📊 Core Financials
- Revenue Growth: Quarterly PAT declined from 104 Cr. to 89.5 Cr., showing slight weakness.
- Profit Margins: EPS at 60.5 ₹ indicates strong profitability despite recent dip.
- Debt Ratios: Very low debt-to-equity (0.01), highlighting robust financial stability.
- Cash Flows: Likely positive given consistent earnings and low leverage.
- Return Metrics: ROCE at 20.9% and ROE at 17.0% reflect strong capital efficiency.
💹 Valuation Indicators
- P/E Ratio: 50.2, slightly above industry average (47.4), suggesting premium valuation.
- P/B Ratio: ~8.23 (Current Price / Book Value), expensive relative to book value.
- PEG Ratio: 4.61, indicates valuation is stretched compared to growth prospects.
- Intrinsic Value: Current price (3,030 ₹) trades near DMA 50 (3,026 ₹) and DMA 200 (3,057 ₹), showing fair valuation with limited margin of safety.
🏢 Business Model & Competitive Advantage
- Timken operates in industrial bearings and mechanical power transmission products.
- Competitive advantage lies in global brand recognition, engineering expertise, and diversified industrial demand.
- Strong balance sheet and efficient capital use provide resilience against cyclical downturns.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive near 2,800–2,950 ₹, offering better risk-reward balance.
- Long-Term Holding: Suitable for investors seeking exposure to industrial growth. Premium valuation limits upside, but strong fundamentals support long-term holding.
Positive
- Strong ROCE (20.9%) and ROE (17.0%) highlight efficient capital use.
- Low debt-to-equity ratio (0.01) ensures financial stability.
- EPS of 60.5 ₹ reflects solid earnings power.
Limitation
- High P/E ratio compared to industry average.
- PEG ratio at 4.61 suggests valuation is expensive relative to growth.
- Quarterly PAT declined slightly, showing near-term weakness.
Company Negative News
- FII holdings decreased (-0.45%), showing reduced foreign investor confidence.
- Quarterly PAT fell from 104 Cr. to 89.5 Cr.
Company Positive News
- DII holdings increased (+0.43%), reflecting domestic institutional support.
- Stock trading near DMA levels, showing technical stability.
Industry
- Industry P/E at 47.4, slightly lower than Timken’s valuation.
- Industrial bearings sector benefits from infrastructure, automotive, and manufacturing demand.
Conclusion
- Timken shows strong fundamentals with efficient capital use and low debt.
- Valuation is stretched compared to industry, limiting near-term upside.
- Best suited for long-term investors seeking industrial exposure, with entry near 2,800–2,950 ₹ offering better value.
I can also prepare a peer comparison HTML table (Timken vs SKF India, Schaeffler India) to highlight relative valuation and efficiency metrics if you’d like.