Dull Q4 slows down SKF India

Shares of bearings-maker SKF India is down 4.6% or by Rs. 67 and is currently trading at 1,406. Q4Cy14 and CY2014 results declared by the company last evening snapped the 2 day rally, when share had peaked at Rs. 1489.25 on the NSE on Wednesday.   

Company’s  Q4CY14 results were dull - despite revenue being flat QoQ at Rs. 615 crore, EBITDA declined 27% QoQ to Rs. 74 crore (Rs 102 crore in Q3CY14), with EBITDA margin contracting to 12.1% from 16.7% in Q3CY14, as material and employee costs soared. Thus, net profit also reduced by 30% QoQ to Rs. 41 crore from Rs. 59 crore in the September quarter, resulting in EPS of Rs. 7.8. Full year EPS for CY14 stood at Rs. 38.5, up 22% YoY.

It has recommended final dividend of Rs. 2.5 per share, which is in addition to Rs. 7.5 interim dividend paid during the year. With networth of Rs. 1,416 crore, company is debt-free with cash surplus of Rs.  100 per share. At CMP of Rs. 1406, share is trading at a PE multiple of 33 times. Given the select revival in the auto industry, company is cautiously optimistic about the future.