Earnings Call Transcript Analysis Report #
Financial Performance #
Revenue #
Timken India Limited reported its best-ever December quarter (Q3 FY25), with revenues reaching INR 671 crores, a 9.7% year-over-year (YoY) growth. Sequentially, revenue was down due to business cyclicity.
Profitability #
PBT margins stood at 14.6% for Q3 FY25, compared to 14.9% in the prior year period. This was described as a “resilient margin performance” despite an unfavourable product mix, offset by cost leverage. Compared to the previous quarter, margins were down due to adverse deleveraging costs.
Balance Sheet #
The company maintains a debt-free balance sheet with strong cash reserves.
Revenue Breakdown #
Segment-wise revenue contribution for Q3 FY25:
- Rail: INR 116 crores (17%)
- Mobile others: INR 139 crores (21%)
- Distribution: INR 127 crores (19%)
- Process (stationary equipment): INR 132 crores (20%)
- Export: INR 152.x crores (23%)
- Export incentives: 1%
- Total: INR 671.4 crores
Year-to-Date Performance #
Year-to-date (9 months FY25) revenue was INR 2,208 crores.
Segment-wise YTD contribution:
- Rail: 21%
- Mobile: 19%
- Distribution: 19%
- Process stationery: 20%
- Intercompany (Export): 20%
- Other (export incentives): 1%
Strategic Initiatives & Business Updates #
Bharuch Greenfield Project #
- The building, utility areas, DG sets, power backups, and 66 kVA line are complete.
- All machines are inside the building, awaiting HVAC connection for unboxing.
- Initial PPAPs (Production Part Approval Process) are targeted by the end of March 2025.
- The plant will produce Spherical Roller Bearings (SRB) and Cylindrical Roller Bearings (CRB) for the first time in India for Timken, up to 400mm for SRB and 300mm for CRB.
- Capacity Utilization Target: 50-60% in the first year (FY26), 70-75% in the second year, and full capacity by the third year.
- The major focus for the new plant is exports, followed by import substitution and new domestic customers.
Parent Company Strategy & Localization #
- A new seasoned leader at the parent company (The Timken Company) emphasizes sourcing from “best-cost countries.”
- Strategy includes “local for local, and local for local plus global” and integration on the drivetrain.
Future Localization Opportunities #
Future localization opportunities in India for other Timken product lines include:
- Industrial Motion: Lubrication systems, couplings, chains.