Feb'25 View on SKF India Ltd

SKF India Ltd is a leading supplier of products, solutions & services within rolling bearing, seals, mechatronics, and lubrication systems. • Q3FY25 EBITDA was 30% below our estimates; lower-than-expected gross margins. • We expect a gradual improvement in gross margins over the coming quarters. • Medium term growth will be driven by rise in bearing content in railways segment, a pickup in industrial segment revenues and a steady performance in auto segment. • SKF India to demerge industrial business and list it as a separate entity. • We expect earnings per share (EPS) to grow by 24 % in FY26E & 24.1% in FY27E. • Retain ADD rating with a revised fair value of Rs4,150 based on 28x March 2027E.