SNL Bearing - consistent growth

SNL Bearings Ltd was incorporated as ‘Shriram Needle Bearings Industries Ltd’. The company was promoted by the ‘Shriram Group’ in 1983 in Ranchi, Bihar. It was a joint venture with Industriewerk Schaeffler INA, Germany to manufacture bearings. The joint venture agreement came to an end in 1997. In June 2000, SNL was acquired by NRB Bearings Ltd (NRB) and its name was changed to SNL Bearings Ltd (SNL). SNL manufactures ball bearings and roller bearings. Its offerings in roller bearings include tapered bearings, cylindrical bearings, needle bearings, spherical bearings, thrust bearings and others. These products are largely used by companies in automobile sector, general engineering sector, railways, and by electrical equipment manufacturers. It also manufactures special purpose machines and tools for the bearings industry. SNL Bearings Ltd is total solution provider engaged in the manufacture and marketing of anti-friction bearing products

The products of the company are supplied to a customer base comprising of original equipment manufacturers producing motorcycles, scooters, cars and trucks in India, and the company has made successful inroads into the motorcycle, chainsaw, hand tool and other industrial markets worldwide with established customers.

Industry Applications
• Automotive
• 2/3 Wheelers
• Motorcycles
• Scooters
• Three Wheelers
• Passengers Cars
• Commercial Vehicles.
• Tractors & farm Equipment
• Off High Way

Global Footprints
• USA
• Italy
• UK
• Portugal
• France
• Indonesia
• Malaysia
• Taiwan
• Singapore
• Thailand.
• Vietnam
• Philippines
• UAE
• Kenya
 
Products
• Needle Cages & Roller Cages
• Needle Bushes
• Bearing with Cage-Guided Needles
• Full Complement Needles Bearings
• Needle Rollers
• Cylindrical Roller Bearings
• Crank Pins
• Ball Bearings
• Tapered Roller Bearings

At the current market price of Rs.101, the stock P/E ratio is at 10x FY15E and 9x FY16E respectively. Earnings per share (EPS) of the company for the earnings for FY15E and FY16E are seen at Rs. 10.57 and Rs. 11.55 respectively. Net Sales and Operating Profit of the company are expected to grow at a CAGR of 7 percent and 3 percent over 2013 to 2016E respectively. Price to Book Value of the stock is expected to be at 2 x and 1.5 x respectively for FY15E and FY16E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. Hence, we provide a positive coverage on the stock and medium term stock holders can look for right opportunity to buy it.