Shares of Timken India soared nearly 20% in intra-day trade on Thursday, reaching an all-time high of ₹3,506 after the company announced to set up of a new manufacturing facility at Bharuch, Gujarat. The new facility will manufacture spherical roller bearings (SRB) and cylindrical Roller Bearings (CRB) and components thereof, the company said in an exchange filing.
The company already has a manufacturing plant at Bharuch, Gujarat, wherein primarily tapered roller bearings (TRB) and their components are manufactured.
The new facility will incur a cost of ₹600 crore, which will be funded by internal accruals. The company will target both domestic and International markets including the US and Europe.
The stock opened with a gap up of ₹33.3, or 1.13%, at ₹2,955 apiece, and it maintained the same momentum during the trade. At 02:30 p.m., the scrip was trading at ₹3,465 around 18.50% above its previous close of ₹2,921.70.
Despite the company's September quarter results falling short of analyst expectations, the stock rose for the last eight trading sessions, delivering a return of 27.59 per cent.
In the last one year period the stock has gained more than 75%, in contrast to the movement in the Nifty50 index, which has increased by 2.25% in the same period.
Further, the market price of the stock has surged nearly 295.14% in the last three years and 340.35% in five years. The company commands a market capitalization of Rs. 25,433.71. It has an EPS of Rs. 54.08.
On November 02, the company reported a 23.23% YoY jump in its consolidated net profit at ₹97.6 crore for the September-ending quarter as against a net profit of ₹79.2 crore in the same quarter of last fiscal. But when compared to the preceding quarter, the net profit was down 17.35%.
The revenue from operations rose 27.63% to ₹716.9 crore, as against ₹561.7 crore in the corresponding quarter of the last fiscal. In Q2, the company's EBITDA margin dropped to 19%, the lowest level since the quarter ending in June 2021. On a YoY basis, the EBITDA margin fell 319 basis points.
Domestic brokerage firm, ICICI Direct Research, has given a "buy" call on the stock with a target price of ₹3,560/share in its research report dated August 16, 2022.
Timken India is primarily into the manufacture and distribution of tapered roller bearings, components, and accessories for the automotive sector and the railway industry. It also provides maintenance contract services and refurbishment services.
An average of 05 analysts polled by MintGenie have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.