Timken India shares gained 11 per cent in Thursday’s trade, snapping a three-day losing streak. JM Financial has maintained a buy rating on the stock at Rs 3,700 based on 45 times FY25E EPS. On Thursday, the stock gained 10.99 per cent to hit an intraday high of Rs 3,670. JM Financial’s target suggests no upside for the stock from here.
JM Financial said Timken India is poised to benefit from macro tailwinds in the bearings industry such as relocation of manufacturing facilities to India, entry into new segments (CRB and SRB) and growth in sectors such as defense and aerospace, F&B and medical devices. Development of new vertical for exports.
It expects Timken India to benefit from a cyclical recovery in FY23-35 in its existing domestic segments ie commercial vehicles and railways.
The company recently held a conference call to clarify its growth plans over the next three to five years.
Key highlights include an investment of Rs 600 crore over the next 24 months to increase its addressable market size including CRBs and SRBs (primarily used in mining, paper pulp and wind) to an estimated Rs 3,700 crore Industry size included.
It suggested that continued changes in production lines by the parent company could open up new verticals such as defense and aerospace, food and beverages and medical equipment exports in the future.
It also cited a large tender of 90,000 wagons by the Indian Railways, with additional volumes for the DFC corridor and high speed rail rolling stock and a cyclical increase in CV volumes.
JM Financial said, “The outlook for exports in the near term remains uncertain as the order book remains strong, but growth from Europe has moderated.”
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