Buy NRB Bearings; target of Rs 217: HDFC Securities

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26 Aug, 2025 12:21

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HDFC Securities' research report on NRB Bearings

NRB  posted  strong  numbers  in 4QFY18. Revenue came in at Rs 2.35bn (+25% YoY),  fuelled  by  strong  growth across OEMs segments (2W, CV and tractor segment)  and  export. EBITDA rose 69% YoY to Rs 422mn with margin at 17.9% (+468bps  YoY), driven by operating leverage and richer product mix (higher revenue  from  CVs).  APAT  at Rs. 268mn (+129% YoY, 26% QoQ) led by strong operating performance and higher other income (Fx gain Rs 50mn) NRB’s growth story is premised on (1) Strong volume growth in OEMs (account for ~65% of revenue), (2) Revival in exports, led by a recovery in the North-American and European truck /PV markets (~22% of revenue), (3) Incremental revenue from the Defence, Aerospace and Railway segments, and (4) Reduction in debt along with fall in interest cost.

Outlook

We  have  increased  our  19/20E  by  20/18% factoring in revival in CV and export  sales  along  with  margin  expansion. We value the stock at Rs 217 (18xFY20E EPS). Maintain Buy

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