FAG Bearings India Ltd. has given a 142% return on a year on year basis as the Auto Ancillary Stocks have rallied on recovery of the Auto sales in the current financial year 2014-15. We had recommended the stock at Rs.1590 per share and the current market price of the stock is at Rs.2796 per share.
FAG Bearings India Limited was incorporated in 1962. Since January 2002 FAG has been integrated into a strong network with INA and LuK to form the Schaeffler Group. INA and FAG became the world’s second largest rolling bearing manufacturer. FAG Bearings India Limited, a member company of FAG group of Germany, is a leading player in the Indian Bearing industry. The company manufactures a very wide range of bearings conforming to international quality standards. The manufacturing plant is located at Vadodara in Gujarat.
The company manufactures range of ball and roller type bearings. They find applications in industrial, railways and automotive industries. The company caters to all major industry segments that include Construction Machinery, Electrical Engineering, Fluid Technology, Conveying equipment, Industrial Gears, Mining & Cement, Power Generation, Agricultural Engineering, Steel plants, Motorcycles, Textile Machinery, Machine tools, Wind power, Pulp and Paper and so on. In the automotive sector the company supplies to all leading OEMs like Maruti, Tata motors, Ashok Leyland, Bajaj Auto and Hero Motocorp. FAG is the largest supplier of hub bearings to the Indian Passenger Car segment of the Automotive Industry.
The Indian Railways has been an important customer since the inception of the company in 1962 in India. The company has always taken a keen interest in the indigenization of bearings used in Locomotives (Electric and Diesel), Passenger Coaches, Freight Cars, etc. One unit of the production has been exclusively devoted to the manufacture of bearings supplied to Indian Railways – Integral Coach Factory, Rail Coach Factory, Diesel Locomotive Works, Chittaranjan Locomotive Works, Diesel Component Works and Zonal Railways. Apart from supplying to OEMs the Company also sells bearings for replacement market through dealers throughout the country. The company has exports to the regions of Europe, US and Asia. International customers for the company are Daimler Chrysler, Volvo, Volkswagen, Renault, Voith, Otis and General Dynamics.
The Company reported Sales of Rs.14,470 million with an EBITDA of Rs.2200 million and a net profit of Rs.1590 million in CY 2012. The EBITDA margin was 15.2% and the net profit margin was 11% for CY 2012. The company reported a net profit of Rs.359 million with revenues of Rs.3763 million for the quarter ended September 2013. The Earnings per share was reported at Rs.95.79 and the Return on Capital Employed (RoCE) was reported at 23.5% and the Return on Equity at 19.8% for CY 2012.
The company had no debt at the end of CY 2012 and has a current market capitalization of Rs.26,921 million with a Price to Earnings multiple of 16.91 at Rs.1620 per share. The Price to Book Value is 3.06 and the Market Capitalization to Sales ratio is 1.86. The company had last declared a dividend of 50.00% of Rs.5 per share for the year ended March 2013. The Promoters have a shareholding of 51.33% and the FIIs have a shareholding of 15.88% in the company.