SKF India (500472) Q3 24/25 earnings summary

Executive summary

• The company is undergoing a strategic separation of its automotive and industrial businesses to unlock value, improve capital allocation, and better address distinct customer needs and market trends.

• Unaudited standalone and consolidated financial results for Q3 and nine months ended December 31, 2024, were approved, with statutory auditors issuing an unmodified review report.

• Board approved key management changes, including resignation and new appointments in director and senior management roles.

Financial highlights

• Q3 revenue grew by 15% year-over-year, with consolidated revenue from operations for Q3 FY25 at INR 12,561 million, up from INR 10,919 million in Q3 FY24.

• Consolidated net profit for Q3 FY25 stood at INR 1,095 million, compared to INR 1,321.5 million in Q3 FY24.

• For the nine months ended December 31, 2024, consolidated revenue was INR 37,065.5 million and net profit was INR 3,626.3 million.

• Gross margin contracted by approximately 600 basis points YoY, mainly due to higher traded product costs.

• Margins improved sequentially from Q2 to Q3, with further rationalization expected in Q4.

Outlook and guidance

• Further improvement in gross margins is anticipated in Q4 as traded product costs rationalize.

• Demerger of the industrial business has been approved by the board but is pending regulatory approvals and not yet reflected in the financials.

• Infrastructure spending is expected to drive continued strength in metals, heavy industry, and general machinery segments.

• Long-term margin improvement is expected through increased localization.