SKF India announced a sharp drop in standalone net profit for the quarter ended June 2015.  During the quarter, the profit of the company declined 14.02% to Rs 465.50 million from Rs 541.40 million  in the same quarter last year.

Revenues for the quarter  rose marginally 1.49% to Rs 6,103.50 million, compared with Rs 6,014 million for the prior year period. Operating margin for the quarter stood at 8.31%  as compared to 10.34% for the previous year period.  Operating Income for the quarter was Rs 507.10 million, compared with Rs 621.8 million in the previous year period.

Commenting on the quarterly financial performance, Religare Capital said, ''SKF's second quarter results were below estimates with revenue and PAT growth of 1.5% and -14% year-on-year to Rs 6.1 billion and Rs 466 million, largely due to a 4% decline in the auto segment (41% of Q2CY15 sales). The industrial segment (51%) however grew 10% year-on-year, indicating market share gains in the segment.

We pare our CY15 and CY16 EPS by 9% each to build in lower revenue growth than estimated earlier, leading to a Sep'16 target price of Rs 1,620 compared to Rs 1,800 earlier. We however restate Buy on the stock given SKF's long-term growth potential.''

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