- 01 Nov 2022
- ICICIdirect Research
Timken India reports subdued set of Q2FY23 numbers
TIMKEN - 3846 Change: 147.55 (3.99 %)News:
Revenue for the quarter came in at Rs 695.4 crore, up 24.6% YoY & down 0.5% QoQ (vs. I-direct estimate of Rs 699.2 crore). Gross margins contracted ~600 bps QoQ & ~450 bps YoY. Timken registered an EBIDTA margin of 19% vs 19.8% YoY & 24.5% QoQ & 22.2% YoY (vs. I-direct estimate of 25%) Surprise in EBITDA margin come in due to higher Raw material cost. Absolute EBIDTA came in at Rs 132.1 crore, down 23.6% QoQ (I-direct estimate of Rs 181.8 crore). Employee cost increased by 9.9% YoY & decreased by 3.3% QoQ basis and stands at Rs 38.4 crore, Other expenses decreased by 2.5% QoQ and stands at Rs 106.3 crore. Tracking its operating performance, Timken ended the quarter with a PAT of Rs 97.6 crore (vs. I-direct estimate of Rs 123.7 crore), down 17.4% QoQ. PAT is cushioned by other income of Rs 21.5 crore
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The revenue came tad below our estimate on Revenue front mainly because of subdued performance from Industrial segment that also resulted in lower GMs and EBITDA margins. Timken has a strong growth prospects led by railways, wind and exports, but global slowdown can possess a challenge. Timken is a good bet to play CAPEX recovery theme as it has major presence in Industrial segment. Debt free Balance sheet coupled with high ROE makes Timken a good option in Bearings segment. We maintain Bullish stance on the stock
Impact:
Neutral