Date: 2013-08-01

FAG India Reports First Quarter 2007 Results

FAG India Reports First Quarter 2007 Results


FAG Bearings India Ltd. (FBIL; BSE MIDCAP: 505790, a publicly-traded 51.3% owned subsidiary of INA Holdings, Germany) reported results for first quarter fiscal 2007, ended June 30, 2006, with exceptionally strong performance across the board.

Sales for the first quarter were Rs 1.36 billion (USD $29 million), up 43% from 2006's Rs 953.5 million ($20.5 million).

FAG India's operating margin also improved strongly, hitting 18% of sales, up 472 basis points from 2006's already-strong 13.2% of sales.

Net profit climbed more than 54% in the quarter, hitting Rs 151.6 million ($3.3 million) from 2006's Rs 98.3 million ($2.1 million).

That profitability level reflects the company's net profit margin increase of more than 83 basis points over 2006, reaching 11.14% of sales from 10.3% of sales.

The company's results reflect the impact of both its investment strategy and India's -- and the region's -- continued strong manufacturing growth.

FBIL is a key part of India's bearing industry, with more than 19% market share. In specific markets, it holds much larger shares -- 50% of India's cylindrical and spherical roller bearings, for example.

FAG India exports approximately 18% of production to other INA and FAG operations worldwide, and the parent company in Germany is aggressively expanding that side of its business to take advantage of India's cost advantage.

In India, FBIL sells primarily to OEM customers, and the OEM auto industry accounts for close to 50% of its sales. Automotive and industrial customers include ABB, Bajaj Auto, Crompton Greaves, Indian Railways, Maruti Udyog, Ford, General Motors, Hyundai, Ashok Leyland, Siemens, and Punjab Tractors.

The quarter's results are the first reported under newly-appointed Managing Director Biswarup Dhar. He replaced departing Managing Director D. Jagannath as of May 26, 2006.

Although FBIL's share price took a tumble in mid-May, after hitting a 52-week high of Rs 775, it has since recovered to Rs 520. One year ago, it was sitting at its 52-week low of only Rs 230.

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