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Last Updated : Aug 03, 2020 04:15 PM IST | Source: Moneycontrol.com

Hold SKF India; target of Rs 1490: ICICI Direct

ICICI Direct recommended hold rating on SKF India with a target price of Rs 1490 in its research report dated July 29, 2020.

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ICICI Direct's research report on SKF India


SKF India reported dismal numbers for Q1FY21 as manufacturing activities were disrupted across the value chain. Tracking this, production was halted for more than 50 days at SKF. June saw some green shoots but it was short-lived on account of regional lockdowns. Revenue for the quarter was at Rs 301.2 crore, down 61.2% YoY (vs. I-direct estimate of Rs 351 crore). During the quarter, SKF won some significant orders for rotating equipment performance offerings. Performance for the quarter reflects production loss of more than 50 days. Gross margins stayed stable at 39% vs. 39.7% YoY. However, negative operating impaired the operating performance, as SKF posted EBIDTA loss of Rs 60 lakh. Employee cost fell 11.8% YoY while other expenses declined 50.5% in Q1FY21. Tracking its operating performance, SKF ended the quarter with a loss of Rs 25 lakh. Other income came in at Rs 15.3 crore while there was a tax reversal of Rs 8 lakh during the quarter.


Outlook


We maintain our HOLD rating on the stock with a target price of Rs 1490/share at 25x FY22E earnings.


For all recommendations report, click here


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First Published on Aug 3, 2020 12:42 pm
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