Broker’s Call: Timken India (Add)
InCred Equities
Timken India's first quarter earnings for fiscal year 2027 (FY27) showed a strong performance, with EBITDA rising 21% year-on-year to ₹170 crore, surpassing both the company's estimate and Bloomberg's consensus. Sales increased 15% to ₹930 crore, aligning with estimates. The EBITDA margin improved by 94 basis points to 18.5% due to lower raw material costs.
The Bharuch plant, which ramped up production ahead of expectations, contributed ₹50 crore in revenue for FY27. SRB capacity utilisation is projected to reach 70% by August-September 2026. Expansion of rail component production in Jamshedpur is slated to commence by the end of CY26. Capital expenditure guidance for FY27 remains at 8-10% of sales, unchanged.
Exports grew by 21%, with robust demand from the US, particularly for taper bearings, compensating for weaker performance in Europe, China, and ASEAN. The company has raised its FY27-29 revenue estimates by 1% due to the new Bharuch plant's potential to drive sustained double-digit export growth. The company's ability to pass on higher input costs while maintaining gross margins led to a 2% increase in EBITDA estimates over FY27-29.
Consequently, the stock rating has been upgraded to ADD from HOLD, with a target price of ₹3,812 (previously ₹3,637) based on a forward P/E of 45x, which is in line with the company's seven-year average.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
