SKP - SKP Bearing

📊 NSE: SKP 🏢 Bearings 📅 Last Updated: 12/14/2025 13:30

💰 Financial Performance

Revenue Growth by Segment

Total Operating Income (TOI) grew 11.58% YoY to INR 19.95 Cr in FY16. H1 FY26 revenue reached approximately INR 40 Cr, with the company aspiring for a full-year top line of INR 100 Cr. Segment-wise reporting includes Mulchand and Zammar plants, with the ball plant recently commencing operations.

Geographic Revenue Split

Domestic and export sales are tracked; integration of the French subsidiary is ongoing. The French entity previously achieved 16 million (historical peak), which remains a long-term revenue target for that region.

Profitability Margins

Gross margins moderated from 78% in H1 FY25 to 66% in H1 FY26. PAT margin improved significantly by 1105 bps to 19.00% in FY16 from 7.95% in FY15 due to higher PBILDT and lower depreciation.

EBITDA Margin

Consolidated EBITDA margin stood at 25.4% in Q2 FY26. Standalone business margins are reported as sustainable at 40%. FY16 PBILDT margin was 34.42%, up 698 bps YoY.

Capital Expenditure

Plant 3 has commenced operations and utilization has started. Debottlenecking operations have been completed to increase overall capacity. Historical bank facilities were rated for INR 9.81 Cr.

Credit Rating & Borrowing

CARE BBB-; Stable / CARE A3 (reaffirmed in March 2017). Interest coverage ratio was 8.90 times in FY16, up from 7.62 times in FY15, indicating strong debt servicing ability.

⚙️ Operational Drivers

Raw Materials

Bearing steel, rolled steel (hot rolled and cold rolled), high-grade steel, and alloy steel.

Import Sources

Not specifically disclosed, but the company is susceptible to global steel price movements, implying international market sensitivity.

Capacity Expansion

Plant 3 is now operational and ramping up utilization. Debottlenecking has increased existing capacities to meet growing demand from domestic and export customers.

Raw Material Costs

Raw material costs decreased as a percentage of TOI in FY16, contributing to a 698 bps increase in PBILDT margin. However, H1 FY26 gross margins moderated to 66% due to cost fluctuations.

Manufacturing Efficiency

Operational excellence is driven by in-house processing and product development. EBITDA improvements in H1 FY26 were attributed to operational efficiency gains.

📈 Strategic Growth

Expected Growth Rate

19.66%

Growth Strategy

Achieving the INR 100 Cr revenue target through the turnaround of the French subsidiary, ramping up Plant 3 utilization, adding new customers to the portfolio, and leveraging the PM-KUSUM scheme which is now generating substantial revenue.

Products & Services

Rolling elements including needle rollers, cylindrical rollers, steel balls, and special chemistry balls.

Brand Portfolio

SKP Bearing Industries Limited (SKP).

New Products/Services

Special chemistry balls and customized technical rolling elements developed per client requirements. PM-KUSUM scheme projects are a new revenue stream.

Market Expansion

Ongoing integration and turnaround of the French business to capture European market share. Export volumes are expected to increase over time.

🌍 External Factors

Industry Trends

The bearing industry is highly competitive but growing. There is a shift toward specialized rolling elements and government-backed schemes like PM-KUSUM driving demand in India.

Competitive Landscape

Operates in a highly competitive industry, but maintains high margins through technical specialization and customized solutions.

Competitive Moat

Moat is built on technical expertise, customized product engineering, and a 'develop and offer' model that provides higher margins than competitors who import solutions.