It's the second day of gains for SKF Bearings on Wednesday after the company announced a spectacular 127% growth in annual profit.
Such is the optimism on the counter of the bearings making MNC affiliate, that the stock jumped 5.9% to Rs 48.20 barely as trading commenced on Wednesday.
The scrip clocked heavy volumes of 371,000 shares on BSE in just half-an-hour of trading, higher than even the 169,000 shares notched up in the entire session on Tuesday. On Tuesday, the scrip surged 4.2% to Rs 45.50. The company's results were released after trading hours on Monday.
For Q4 ended 31 December 2002, SKF posted a massive rise in net profit to Rs 7.07 crore compared to a net profit of 0.42 crore for Q4 ended 31 December 2001. Total income jumped 16% to Rs 1.16 million from Rs 100.08 crore (Rs 1 billion). Market men were expecting a strong performance for Q4 by SKF.
For FY 2002 ended 31 December, SKF posted a 127% rise in net profit to Rs 20.42 crore from Rs 8.97 crore in FY 2001. Total income surged 12.8% to Rs 419.85 crore (Rs 4.19 billion) in FY 2002 from Rs 372.10 crore (Rs 3.72 billion) in FY 2001.
The company's interest cost declined sharply in FY 2002 as a result of the capital restructuring undertaken by the company. Interest costs fell 46% in FY 2002 to Rs 10.97 crore from Rs 20.32 crore in FY 2001. Besides, an improvement in the two-wheeler market also helped the strong growth.
Cost-cutting and introduction of new products is the company's main focus. The company is consolidating its position in the OEM as well as replacement market. In the OEM markets, its clients include Telco, TVS Motor and Bajaj Auto. About 40% of the company's revenue comes from the after-market, while the rest from original equipment manufacturers.
SKF is constantly innovating product packaging by using machine sealed three-dimension pouches. SKF Bearings India is a 54% subsidiary of SKF, Sweden.
At the current Rs 48.20, the scrip trades at a PE multiple of 10.7 based on its FY 2002 EPS of Rs 4.50.
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