Emkay Global Financial' research report on Timken India
Timken India Ltd. (TMKN) manufactures and distributes anti-friction bearings, components, and mechanical power transmission products. It also offers maintenance, refurbishment, and industrial services across various sectors. Timken’s Q4FY26 revenue from operations increased 14% YoY to ₹1,073cr, driven by strong traction in core industrial segments, improved execution across projects, and healthy growth in export volumes led by North America. EBITDA rose 12% YoY to ₹235cr in Q4FY26; however, margins declined by 40bps due to elevated input costs, particularly steel and consumables, coupled with a lag in price pass-through. PBT increased 3% YoY to ₹207cr, impacted by higher depreciation and operating expenses, along with labour-related costs, while other income declined 81% YoY to ₹3cr due to lower treasury income. Consequently, PAT for Q4FY26 declined 17% YoY to ₹155cr, with margins contracting by 52bps to 14%, while FY26 PAT declined 11% YoY with margins compressing by 243bps. For FY26, revenue grew 9% YoY to ₹3,419cr, with gross margins expanding by 95bps. However, EBITDA growth remained muted at 3%, with margins contracting by 87bps due to higher operating costs and ramp-up impact from new capacities.
Outlook
With operating leverage benefits, improved cost absorption, and a better product mix, earnings are projected to grow at a CAGR of 26% over the same period. Based on 50x FY28E EPS, we upgrade the stock to BUY rating with a target price of Rs. 4,207.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Timken India - 2206026 - geo