TIMKEN - Timken India

📊 NSE: TIMKEN 🏢 Bearings 📅 Last Updated: 12/14/2025 14:24

💰 Financial Performance

Revenue Growth by Segment

Total revenue for Q1 FY26 was INR 808.8 Cr, a 3.2% increase YoY. Segment performance: Rail contributed INR 196.5 Cr (24% of total), Mobile INR 156 Cr (19%), Distribution INR 146 Cr (18%), Process INR 142 Cr (18%), and Exports INR 164 Cr (20%). Rail revenue saw a significant sequential decline from the historical high of INR 303 Cr in Q4 FY25.

Geographic Revenue Split

Exports accounted for 20% of total revenue (INR 164 Cr) in Q1 FY26. The remaining 80% is primarily domestic. Export incentives for the quarter were approximately INR 3.6 Cr (36 million).

Profitability Margins

PBT margin for Q1 FY26 was 16.1%, a slight compression from 16.6% in the same period last year. Gross margins dipped by approximately 50 basis points during the quarter due to volume mix and cost fluctuations.

EBITDA Margin

EBITDA margin stood at approximately 18% in Q1 FY26. Management noted this is lower than the historical 20%+ range seen 1-2 years ago, primarily due to lower volume leverage and manufacturing overheads from new capacity.

Capital Expenditure

Planned immediate expansion capex is INR 150+ Cr, comprising INR 120 Cr for the Jamshedpur railway facility (cup and cones capacity) and INR 35 Cr for the first plain bearing line in Bharuch. Maintenance capex remains at 'usual' levels.

⚙️ Operational Drivers

Raw Materials

Steel and specialized alloys (implied for bearing manufacturing) represent the primary input costs. Specific percentage of total cost not disclosed.

Capacity Expansion

Bharuch plant capitalized its first Cylindrical Roller Bearing (CRB) line in late June 2025. Jamshedpur is expanding capacity for heavy-duty bearings (cup and cones) with an INR 120 Cr investment to cater to India, South Africa, and the U.S.

Raw Material Costs

Management noted that cost fluctuations are a constant factor; however, specific YoY cost change percentages were not provided. Procurement is managed through a disciplined supply chain focus.

Manufacturing Efficiency

Bharuch plant utilization is targeted to reach 45-50% by the end of FY26. Management emphasizes that volume leverage is the primary driver for manufacturing efficiency and margin recovery.

📈 Strategic Growth

Expected Growth Rate

7-9%

Growth Strategy

Growth will be driven by capacity expansion in Bharuch (CRB, SRB, and Plain Bearings) and Jamshedpur (Rail). The company is also leveraging parent technology in non-bearing portfolios like lubrication and chains. The acquisition of Timken GGB Technology Private Limited (completed Dec 2025) expands the plain bearing footprint.

Products & Services

Tapered roller bearings, Cylindrical Roller Bearings (CRB), Spherical Roller Bearings (SRB), Plain bearings, and Cup and Cones for railway and industrial applications.

Brand Portfolio

Timken

New Products/Services

Plain bearings production is expected to start in Bharuch by next year. New CRB and SRB lines are currently undergoing customer qualifications (PPAP).

Market Expansion

Targeting growth in the Indian subcontinent and exports to South Africa, Australia, and ASEAN regions.

Strategic Alliances

Acquired 100% equity shares of Timken GGB Technology Private Limited from Timken Europe B.V. and The Timken Company on December 1, 2025.

🌍 External Factors

Industry Trends

The Indian Railway sector is shifting toward Dedicated Freight Corridors (DFC), which allows for more passenger trains and modern rolling stock, increasing demand for high-performance bearings.

Competitive Landscape

The company competes in core industrial and railway segments; competitors are not named, but the market is described as cyclical and volume-leverage dependent.

Competitive Moat

Moat is sustained through parent company technology in lubrication, chains, belts, and linear motion, which are being rolled out in India as 'low-hanging fruit' for growth.

Macro Economic Sensitivity

Management projects overall GDP growth at 6.1%, with Rail and Process segments expected to grow at high single digits (7-9%).

Consumer Behavior

Shift toward higher infrastructure spending by the government and private investment in steel and cement industries is driving demand in the Process segment.

Geopolitical Risks

Geopolitical tensions are noted to have an 'emotional impact' on market investment and industrial spending, particularly regarding trade barriers and tariffs.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, particularly Regulation 30 for material event disclosures.

⚠️ Risk Analysis

Key Uncertainties

Potential U.S. tariffs on bearings and the cyclical nature of the Indian Railway procurement cycles (which can cause 30-35% sequential revenue swings) are key risks.