SKF Bearings reported fall of 5.88% in top line sales for the Sep-20 quarter at Rs703.42cr. The operating profits for the quarter ended Sep-20 was lower by 4.41% at Rs77.30cr while the net profits were lower by 23.16% at Rs65.02cr on a yoy basis. The lower net profit was due to lower sales revenues and also weaker other income on a yoy basis.
This had some impact on the margins of SKF Bearings. For the Sep-20 quarter, the operating profit margins or OPM was marginally up by 17 basis points at 10.99%. Net profit margins or NPM for the quarter was sharply down over 200 bps at 9.25%.
Financial highlights for Sep-20 compared yoy and sequentially
|
Particulars |
Sep-20 Quarter |
Growth (yoy) |
Growth (qoq) |
|
Total Revenues |
Rs703.24cr |
-5.88% |
+133.45% |
|
Operating Profit |
Rs77.30cr |
-4.41% |
Not Applicable |
|
Net Profits |
Rs65.02cr |
-23.16% |
Not Applicable |
|
Key Ratios |
Sep-20 Quarter |
Sep-19 Quarter |
Jun-20 Quarter |
|
Diluted EPS |
Rs13.20 |
Rs17.10 |
Rs-0.10 |
|
Operating Margins |
10.99% |
10.82% |
-5.01% |
|
Net Profit Margin |
9.25% |
11.32% |
-0.08% |
Key takeaways from the Sep-20 quarter results
-
The company had taken a big hit in the June quarter due to the pandemic as the global industrial demand for bearings fell sharply after most industries shut down due to COVID. This resulted in weak numbers for Jun-20 making them incomparable.
-
Due to the sharply lower profits in the June quarter, the net cash flows from operating activities in the first half of the fiscal year FY21 almost halved to Rs106cr. The problems of the June quarter have spilled over to the first half.
-
In the AGM, the proposal to pay 5% royalty to the parent company, SKF AB of Sweden, was struck down and the idea has been postponed for the next five years. This should be positive for the market valuations of this company.
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