Bearing Stocks

Bearings are crucial machine components that allow for smooth, high-speed movement while handling heavy loads. They are tiny components that allow one machine part to rotate smoothly while in contact with another part. You can find them in everything from cars and farm equipment to washing machines and aeroplanes. By reducing friction, bearings enable machinery to operate smoothly and extend its lifespan. Bearings can be of different types, like ball bearings, roller bearings, mounted bearings, etc. They can be made of steel, plastic, ceramics, etc.

In India, roller bearings form over 45% of the market share, while the automotive sector is the dominant user of bearings, consuming 46.6% of the total market share in 2021. Speciality steel alloys are the most used material in bearings, at around 89% of the market. Globally, the machinery industry presents the highest demand for bearings, with ball bearings having the highest market share.

While the most advanced bearing manufacturing industries remain in Japan, the US, Sweden, and Germany, these countries rely on imports from lower-cost countries to meet the basic needs of their domestic markets. The Asia Pacific countries like India, China and Japan supply 62% of the production, China being itself a major market.

The bearings industry had been affected by the turbulence of the pandemic and the Ukraine War-related supply chain issues. However, as of January 2024, the sector is expected to expand based on the expected increase in consumer spending, particularly for durable goods, as well as innovation in energy efficiency and use cases.

The global bearing sector’s market size was valued at $120.98 billion in 2023 and is expected to register a CAGR of 9.4% from 2023 to 2030. In India, the market stood at $1.77 billion in 2021, and it is expected to increase to $3.77 billion by the end of 2027, expanding at a CAGR of 10.9%.

Future growth may come from continuous research and development efforts in digitalisation and automation, coupled with strategic partnerships and a focus on sustainable practices. Geopolitical tensions, raw material scarcity, and inflationary pressures pose potential threats to the industry’s growth trajectory.

1. Industry Growth and Demand: Research projected growth rates for both the global and Indian bearings markets. Aim for companies with clients in high-growth subsectors like automotive or renewable energy. Consider the impact of external factors like geopolitical tensions and raw material costs on supply chains and production.
2. Company Fundamentals: Analyse the financial health of individual companies within the sector, focusing on metrics like profitability, cash flow, and capital efficiency.
3. Competition and Market Share: Identify the major players in the Indian bearings market and their respective market share percentages. Focus on established companies with a proven track record and strong brand recognition. Be aware of potential disruptors within the sector, such as newer technologies or changing consumer preferences.
4. Personal Risk Tolerance and Investment Goals: Align your investment strategy with your risk tolerance. Bearings stocks represent a cyclical industry, meaning fluctuations in economic activity can impact performance. Consider your investment timeframe and goals.

Investing in bearings stocks via Angel One is easy. Simply follow these steps:

1. Log in to your Angel One account.
2. Click on the search icon and look for your desired bearings stock.
3. Now, place your buy order. Simply click on the ‘Buy’ button, enter your desired quantity, and select the order type.
4. To complete your transaction, click on the ‘Buy’ button.

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