Timken India (522113) Q1 24/25 earnings summary

Executive summary

• Achieved record June quarter revenue of INR 784 crore (₹7,837.01 million), marking the best-ever Q1 performance, driven by higher volumes in most segments, especially rail.

• Unaudited financial results for the quarter ended June 30, 2024, were reviewed and approved by the Audit Committee and Board on August 8, 2024.

• Maintains a debt-free balance sheet and strong cash position, enabling ongoing strategic investments, including a new greenfield facility in Bharuch.

• Promoter stake reduced by 6.6% to 51.05% following a sale of 5 million shares in Singapore.

• The company operates in a single segment: Bearings and allied goods & services.

Financial highlights

• Q1 FY25 revenue reached INR 784 crore (₹7,837.01 million), up from ₹7,175.82 million in Q1 FY24 and down from ₹8,977.65 million in Q4 FY24.

• Net profit after tax for Q1 FY25 was ₹963.05 million, compared to ₹901.37 million in Q1 FY24 and ₹1,414.30 million in Q4 FY24.

• Earnings per share (EPS) for Q1 FY25 stood at ₹12.80, up from ₹11.98 in Q1 FY24 and down from ₹18.80 in Q4 FY24.

• PBT margin declined to 16.6% from 17.1% year-over-year due to increased energy and transportation costs.

• Gross margin fell below 40%, down from 44%-46% three to four years ago, mainly due to higher steel, energy, and logistics costs.

Outlook and guidance

• Rail segment growth is expected to remain steady and sustainable for the next 20-30 years, supported by government infrastructure initiatives.

• Wind energy market in India is growing, with increasing local manufacturing and technology adoption, though large-bore bearings are still imported.

• Export growth faces near-term headwinds from higher logistics costs and geopolitical issues, but North and South American rail demand remains strong.

• Other expenditure as a percentage of sales is expected to remain stable or decrease in the next quarter.

• Previous period figures have been recast where necessary to conform to current period classification.