SKF India (500472) Q4 12/13 earnings summary

Executive summary

• 2013 net sales rose 2% YoY to ₹22,464.4 million; PAT fell to ₹1,667.2 million after a ₹221 million VRS charge, amid weak demand and industrial activity.

• Customer-focused solutions, aftermarket growth, exports and efficiency measures helped sustain profitability and strengthen market leadership despite macroeconomic headwinds.

Financial highlights

• Revenue from operations was ₹22,749.6 million vs ₹22,275.9 million; total revenue was ₹23,381.3 million vs ₹22,959.1 million.

• PBT was ₹2,530.3 million vs ₹2,831.3 million; excluding the ₹221 million VRS charge, PBT was ₹2,751.3 million, 3% below prior year.

• PAT was ₹1,667.2 million vs ₹1,900.8 million; basic and diluted EPS was ₹31.6 vs ₹36.0.

• Board recommended a dividend of ₹7.5/share, or 75%, unchanged YoY; total cash outflow including dividend tax was ₹462.7 million.

Outlook and guidance

• Near-term prospects remained challenging; mid- to long-term growth prospects were viewed as favorable, supported by India’s demographic dividend and potential recovery in manufacturing.

• A revival in the investment cycle, policy action, infrastructure development and easing inflation and interest rates were seen as potential supports to demand.

• Strategy emphasized technology-led products and services, customer value, sustainable practices and continued investment in product development and energy efficiency.