Please refer to important disclosures at the end of this report
Timken India (TIL) is primarily into the manufacture and distribution of
tapered roller bearings, components and accessories for the automotive
sector and the railway industry. It also provides maintenance contract
services and refurbishment services. Timken enjoys a market share of 45% in
its sector. TIL has performed consistently with a 5 year CAGR of 18.3% in
sales and 26.7% in profits.
With increased freight market share through dedicated freight corridor
(DFC), passenger coach modernization, introduction of Bullet train and rapid
urban mobility enhancement, Timken India is likely to outperform its peers.
Further, the management said that investments in new manufacturing line for
bearing parts for US$11mn and ramp up of Bharuch factory (utilisation
levels to move from 50%to 60%) to increase localization. Also, multiple
factors like qualification of Bharuch factory in Timken Circle R supply chain
and commencement of supplies to Russian Rail is likely to increase share of
exports to 50% of sales over next 3-4 years vs 25-30% in past 2 years.
On the financial health front, the company is virtually debt-free, which
makes the balance sheet strong. The operating cash flow is also seen
increasing year after year.Currently, the stock trades at 32x of its earnings
and delivers 21.7% RoCE. It also pays an average annual dividend of 20%.
Hence, recommend BUY on the stock.
CMP `1034
Reuters Code
BSE Sensex
Face Value (`)
Auto Ancillary
Market Cap (` cr)
52 Week High / Low
Avg. Daily Volume
Jaikishan Parmar
022 3935 7600 Ext: 6810
Timken India Ltd
Others | Auto Ancillary
Feb 18, 2020
Timken India| Auto Ancillary
Research Team Tel: 022 - 39357600 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Timken India
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)