Buy Timken India; target of Rs 4207: Emkay Global Financial

About this update from Timken India Limited

Emkay Global Financial' research report on Timken IndiaTimken 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.OutlookWith 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

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