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Informist, Tuesday, Aug. 5, 2025

By Ketaki Patil

MUMBAI - SKF India Ltd. is expected to report a marginal on-year rise in net profit for the June quarter on the back of healthy growth in the industrial and automotive sectors. However, profit after tax for Apr-Jun is seen falling sequentially due to margin compression.

The company's net profit for the June quarter is estimated at INR 1.61 billion, according to the average of estimates from four brokerages. This would mean a 1.6% rise from a year ago but a 20% decline from the trailing quarter. The highest estimate for net profit is INR 1.81 billion from Kotak Institutional Equities and the lowest is INR 1.45 billion from Anand Rathi Share and Stock Brokers Ltd.

SKF India's revenue for the June quarter is estimated to rise 7% on year and 6% on quarter to INR 12.88 billion. The highest revenue estimate is INR 13.08 billion from Centrum Broking Ltd. and the lowest is from Nuvama Wealth Management Ltd. at INR 12.66 billion.

The company's net profit is likely to rise on the back of steady demand across industrial segments such as railways, process industries, and power transmission, according to Centrum Broking. The brokerage also attributed the growth to recovery in the automotive segment, particularly two-wheelers, small commercial vehicles, and tractors. The company is expected to post double-digit growth in the industrial sector and steady volumes from two-wheelers and commercial vehicles. 

Kotak expects the company's revenue for the June quarter to grow by a mid-single digit, supported by year-on-year growth in the two-wheeler original equipment manufacturer business and low-double-digit increase in the industrial original equipment manufacturer segment. The automotive and industrial replacement segments are also likely to see 5–8% growth compared to last year, the broking firm said.

"We expect (SKF India's) EBITDA (earnings before interest, tax, depreciation and amortisation) margin to decline 16 bps (basis points) YoY (year on year) and 756 bps QoQ (quarter on quarter) to 15.9%," Centrum Broking said. The decline in margin is the reason why the company's net profit is expected to rise only marginally on year and fall sharply sequentially despite a growth in revenue. Nuvama, on the other hand, expects SKF India's EBITDA margin to remain largely unchanged.

The company's EBITDA for the reporting quarter is likely to be in the range of INR 2.04 billion to INR 2.20 billion. Kotak Institutional Equities has the highest estimate for SKF India's EBITDA, followed by Centrum Broking and Nuvama Wealth in decreasing order.

SKF India will announce its earnings for the June quarter Wednesday. Analysts will watch out for the outlook on demand across end-user industries, the company's capital expenditure plans, and management commentary on the progress of the proposed business demerger of its industrial business into a separate listed company.

Tuesday, SKF India's shares closed marginally higher on the National Stock Exchange at INR 4,791.90. The shares are up 4.7% since the company announced its March quarter earnings. All six brokerage recommendations on the company available with Informist have a "buy" or equivalent rating with an average target price of INR 5,379.

Following are the Apr-Jun earnings estimates, in INR million, for SKF India Ltd., based on reports from four brokerages in descending order of net profit:

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Edited by Nishant Maher

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