NRB Bearings Ltd | Fundamental Analysis

By | 4th April 2018

CMP: 153.60          Target Price: 203.00          Upside:32%

Reasons to Invest:

  • NRB Bearings is an anti friction bearing solution provider, offering end-to-end bearing solutions to its customers across the globe. The company is a recognised leader in needle roller bearings, conventional cylindrical roller bearings and has developed a new generation of lightweight drawn cup bearings.
  • NRB Bearings holds nearly 70% market share in the bearings industry. It caters to all segments of the automobile industry and draws around 65% of its revenue from the domestic original equipment manufacturers.
  • The Automotive Mission Plan (AMP II) for the period 2016-26 aims to propel the Indian Automotive industry to be the engine of the Make In India program as it is amongst the foremost drivers of the Manufacturing sector and is likely to contribute 40% of the Manufacturing Sector, adding in excess of 12% of India’s GDP over the next decade. India will be among the top 5 of the world in engineering, manufacturing and exports of vehicles and auto components.You may like this: CYIENT LIMITED – Fundamental Analysis
  • NRB Bearings is investing in and building its Research & Developments (R&D) capabilities to develop product lines with improved performance and margins, working on eliminating waste from operations by continuously reviewing and streamlining its production processes.
  • With a proven track record of many years, it is the preferred supplier to leading domestic OEMs such as Hero MotoCorp, Bajaj Auto, Maruti Suzuki, Tata Motors and Ashok Leyland,among others. Company, with its reputation for high quality, wide product portfolio and lasting customer relationships, used its extensive and high quality
    product offerings to deliver performance and sustainable results to its customers. You may like this: Experts’ Advice For The Week Of 12 March To 16 March, 2018
  • During the quarer ended December 2017, NRB Bearings has recorded 178 percent jump in net profit at Rs 21.30 crore against Rs 7.66 crore. Revenue was up 25.8 percent at Rs 207.87 crore versus Rs 165.29 crore. The company has consistently given back a significant chunk of their net profits to shareholders in the form of dividends.

Valuation

According to the management of the NRB Bearings, the business environment is expected to improve going forward, with economic performance and Government initiatives to increase the spend on rural infrastructure and the “Make in India’’ drive to boost manufacturing. The company is also looking to procure incremental revenue from the defence,
marine, OEMs and railway segments. Thus, it is expected that the stock will see a price target of Rs.203 in 8 to 10 months time frame on an expected P/E of 23x and FY19 EPS of Rs.8.81. You may like this: Take Solutions | Fundamental Analysis

Face Value Rs.: 2.00
52 Week High/Low 182.70/103.15
M.Cap Rs. in Cr.: 1488.38
EPS Rs.: 5.29
P/E Ratio (times) 29.03
P/B Ratio (times) 4.69
Dividend Yield (%) 0.90
Stock Exchange BSE

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Disclaimer:

My descriptions, videos, presentations are only for educational and information purposes and under no circumstances should be used for making investment decisions. I cannot guarantee the accuracy of any information provided.
The stocks picks are based on my own research and personal views and sometimes are from newspapers, tv channel program, magazines, etc. No part of compensation is or will be directly or indirectly related to the views and recommendations of this research. I have not served as an officer director or employee of company and have not been engaged in market – making activity of the company covered in the research report. Consult qualified financial advisor before making any investment decision.

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