Stock price of this automotive supplier firm has doubled in last 6 months

Shares of Schaeffler India soared 10 per cent to hit a new high in Monday's intra-day trade. The stock has surged 16 per cent in the last four days.

Shares of Schaeffler India soared 10 per cent to hit a new high of Rs 3,444.95 on the BSE in Monday’s intra-day trade, and have surged 16 per cent in the past four trading days.

In the past six months, the stock of the industrial and automotive supplier has more-than-doubled or up 107 per cent from a level of Rs 1,660 touched on March 7, 2022 on strong earnings. In comparison, the S&P BSE Sensex was up 6 per cent.

With 3 well known product brands LuK, INA and FAG, 4 manufacturing plants and 8 sales offices, Schaeffler has a significant presence in India. The manufacturing plants in Maneja and Savli (Vadodara) produce a vast range of ball bearings, cylindrical roller bearings, spherical roller bearings and wheel bearings that are sold under the brand name of FAG.

The plant at Talegaon near Pune, manufactures engine and powertrain components for front accessory drive system, chain drive systems, valve train, gear shift systems and a range of needle roller bearings and elements, under the brand INA. The fourth manufacturing location is based out of Hosur, producing a wide range of clutches and hydraulic clutch release systems for passenger cars, light commercial vehicles, heavy commercial vehicles and tractors sold under the brand of LuK.

For six months ended June 2022 (H1CY22), Schaeffler India reported 61.7 per cent year on year (YoY) jumped in profit after tax at Rs 432.90 crore against Rs 267.7 crore in H1CY21. Revenue grew 30 per cent to Rs 3,316 crore from Rs 2,550 crore during the same period last year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) improved 240 bps to 19.2 per cent from 16.8 per cent.

Margins remain consistent for the quarter, despite input cost pressure. Volume gains and sustained countermeasures helped achieving consistent performance for H1CY22, Schaeffler India said. The free cash flow generation improved owing to a better performance – cash profit and working capital improvement, the company said. Schaeffler India follows a January to December accounting year.

The year 2021 has been a record year for Schaeffler India in terms of business performance. The company won a healthy order book in all the business segments, which is bound to help the company sustain its growth momentum for 2022 and beyond. Various government initiatives to boost the automotive and manufacturing sectors will also enable faster growth for the Company, the company said in 2021 annual report.

Meanwhile, to encourage wider participation of investors and improve the liquidity of the equity shares in the stock market, Schaeffler India sub-divided/stock split of equity shares of the company from face value of Rs 10 each into five equity shares of face value of Rs 2 each. The stock had turned ex-date for split on February 8, 2022.