Edelweiss' research report on Schaeffler India
Schaeffler India, a leader in cylindrical and spherical roller bearings, has announced merger of its group companies INA Bearings (leader in needle roller bearings) and LuK India (a clutch and transmission component systems player for automotive systems) with itself. The merger will create a combined entity of INR35.7bn in revenue, having EBITDA of INR5.68bn and PAT of INR3.24bn.
Outlook
It stands to further gain from capex of ~INR7.5‐10bn planned over next 5 years as a group. We maintain ‘BUY’ based on target multiple of 28x CY18E EPS.
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