Timken India stock generated 17.3% year-to-date returns; why it is this week's top stock
The engineered bearings and industrial motion products manufacturer registered 9.2% and 3.8% growth in revenue and EBITDA, respectively, year-on-year, in the June quarter. Despite healthy volume growth across segments, the numbers missed the Reuters-Refinitiv estimates by 3.2% and 15.5%, respectively, due to weakness in the mobility segment, muted exports growth (amid the Red Sea issue) and higher input costs. However, the domestic business supported the performance led by the railways, process and distribution segments.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;} The company offers a diverse range of products used in food production, transportation, automation, and renewable energy industries. Some products that it offers in industrial motions include automatic lubrication systems, linear motion products, belts, couplings, and industrial clutches. The bearings feature precision tolerances and proprietary internal geometries.
The company is a beneficiary of the growing global bearings market, which is expected to grow at a CAGR of 9.5% between 2024 and 2030, according to the company’s 2023-24 annual report. Rising demand for vehicles with technologically advanced solutions, the growing aerospace segment due to stringent environmental legislation, and accelerated railway construction are some of the factors that will support the bearings market. Moreover, the domestic business outlook is positive as healthy growth in the railways segment continues, which will boost the demand for bearings. Increasing orders for freight and wagons for dedicated freight corridors, rising metro expansions in tier 2 cities and Vande Bharat coach conversions are some of the factors that are boosting the domestic railways segment.
There are emerging opportunities in solar and wind segments in the domestic market. To expand its solar business, the company has started manufacturing cone drives for use in solar panels. There is a big opportunity for large-scale bearings in the wind sector. The management sees strong growth along the Gujarat/Kutch coast.
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While the export business is yet to pick up, the rail business in North and South America is gaining traction. The demand for heavy trucks is expected to improve after the US elections. An Asian Markets Securities report estimates 16% export revenue growth between 2023-24 and 2026-27.
The management is expanding its manufacturing footprint to support growth. Production in the greenfield facility at Bharuch is expected to start in the fourth quarter of the current financial year. Analysts also list strong capex in the process industry like steel, cement and infrastructure, and China plus one strategy as key positives.
The stock has outperformed the market benchmark in 2024 by generating 17.3% year-to-date returns, compared to the BSE Sensex, which registered 15.1% returns.
Selection methodology: We pick the stock that has shown the maximum increase in ‘consensus analyst rating’ during the past three months. The consensus rating is arrived at by averaging all analyst recommendations after attributing weights to each of them (1 for strong buy, 2 for buy, 3 for hold, 4 for sell, 5 for strong sell). An improvement in consensus analyst rating indicates that the analysts are getting bullish on the stock. Only stocks with more than five analysts covering them are considered. You can see similar consensus analyst rating changes during the past week in ETW 50 table.
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This story originally appeared on: India Times - Author:Faqs of Insurances
