SKF India (Industrial) Ltd

SKF India (Industrial) Limited – Trading Window closed from 01 October 2026 till 48 hours after declaration of Financial Results for the second quarter and half year ending 30 September 2026

Resolutions

• Resolution 1 (Ordinary): Sujeeth Pai to be MD for 5 years from 1 Sept 2026 with remuneration.
• Resolution 2 (Ordinary): Mukund Vasudevan appointed Non-Executive Non-Independent Director from 1 Sept 2026, liable to retire by rotation.
• Outcome not disclosed in the notice; voting window from 16 Sep to 15 Oct 2026.
• Material impact: governance changes; no share capital changes.
• Eligibility cut-off: 4 September 2026.
• E-voting window: 16 September 2026 to 15 October 2026.
• Sujeeth Pai background: Mechanical Engineering (PESIT), MBA (ISB).
• Mukund Vasudevan background: B.Tech (IIT Mumbai); age 56; 25+ years P&L/strategy.
• Remuneration terms for Sujeeth Pai to be within Schedule V limits.

Management changes

• Change in designation: Sujeeth Pai from Whole-Time Director to Managing Director; effective 1 September 2026.
• Cessation as Whole-Time Director on 31 August 2026.
• Appointment as MD for five-year term, subject to shareholders' approval.
• Reason: replacement for Mukund Vasudevan who resigned due to internal SKF Group role change.
• Profile: Mechanical Engineering degree (PESIT), MBA (ISB); ~20 years' experience.
• Relationship: Not related to other directors or KMPs.
• Shareholder approval: required; Members to approve within 3 months from appointment.
• Term: five years from 1 September 2026.
• Not debarred from holding the office.

Directorate change: appointment and cessation

• Appointment: Mukund Vasudevan appointed Non-Executive, Non-Independent Director, effective 1 September 2026, subject to shareholders' approval.
• Cessation: Resigned as Managing Director effective 31 August 2026.
• Term: Appointment subject to approval of shareholders within 3 months from date of appointment.
• Profile: IIT Bombay BTech, MBA Chicago; 25+ years in P&L, strategy, sales, M&A.
• Relationship: Not related to other directors or KMP.
• Regulatory: Not debarred from holding office of director by SEBI or other authorities.

Resignation of Managing Director

• Mukund Vasudevan, MD, resigned 31 Aug 2026; SKF Group role change; no other material reasons; MD/board committees vacated.

Financial Performance

• Revenue from operations was INR 9,708 million; YoY growth 18.3%.
• QoQ revenue growth: 2.6%.
• PBT was INR 869 million; margin 9.0–9.5%.
• Cash conversion reached 63.0% of the quarter's cash flow.

Operating Update

• Strong performance across segments: general machinery, wind, heavy, rail.
• Orders won: INR 140 crores (gearbox) and INR 35 crores (agri OEM).
• Pune line adds 3 million units annually for India/export.
• Tapered roller bearing line; supports agriculture, gearbox, aftermarket.
• Humanoid robots and data centers in India: early days.
• Capex for Pune plant: INR 850-900 crores; production starting 2028.
• Pune capacity aligns with both domestic and export demand.

Balance Sheet & Cash Flow

• Net working capital almost flat; operating cash flow solid.
• One-time outflow for name change and land transfer.
• One-time IT cost for demerger: ~INR 150 million; forex losses ~INR 147 million.

Capex & Projects

• Capex guidance: INR 850-900 crores for Pune plant.
• Pune plant to start production by 2028.
• Payback period expected at 5-7 years.
• Space constraints require a new factory; some channels moved from automotive.
• One additional TRB line by 2027; one more channel by early 2027.

Outlook & Guidance

• Path to 14-16% margins beyond 2028; near-term pressure from investments.
• Margins expected to improve from manufacturing efficiencies; Pune plant online 2028.
• Current margin around 9%; improvement possible through efficiency.

Q&A Highlights

• Innovation focus strongest in general machinery; some sectors slower to adopt.
• Humanoid robots in India: early stage; data centers demand modest, mainly pumps.
• Order book growth largely recurring; wind gearbox order is 1-year term; others longer-term.
• Tapered roller bearing line serves agriculture, gearbox, aftermarket.
• Solutions business share 6–7% today; potential to grow.
• Channel mix: distribution ~34%, OE ~54%.

Risks & Watchpoints

• Space constraints require a new factory; project timing uncertain.
• Demerger stabilization needed; IT and forex cost volatility.
• Near-term margin pressure from investments; long-term focus on efficiency.

Meeting Details

• Date and time: 14 August 2026, 11:00 IST.
• Type and mode: Analyst/Institutional Investor Meeting; mode not specified.
• Organiser: SKF India (Industrial) Limited.
• Purpose: Discuss Financial Results for Q1 ended 30 June 2026.
• Key company participant: Company Secretary & Compliance Officer.
• Recording: Audio recording available on the company website.

Business Overview

• Industrial segment manufactures bearings and related solutions in India.
• Q1 FY27 results reflect demerged Industrial undertaking performance.

Key Operational Highlights

• Operationalized TRB line, adding 3 million units annual capacity.
• Railway wheel-set bearings extend maintenance intervals by up to 20%.
• Energy-efficient hybrid bearings launched for next-generation electric drives.
• Localization investments strengthen competitiveness and reduce import exposure.

Financial Performance

• Revenue INR 9,708 MN; YoY 18.3%, QoQ 2.6%.
• PBT INR 869 MN; margin 9.0%; forex loss reduces margins 56 bps QoQ.
• Operating cash flow INR 547 MN; cash conversion 63%.
• Net working capital INR 6,275 MN; NWC 17.5% of revenue.

Strategic Priorities & Outlook

• Localization, innovation, and digitalisation to strengthen growth and profitability.
• Predictive, data-driven solutions and talent development emphasized.
• Industrial footprint expansion and faster delivery to boost competitiveness.

Risks & Mitigation

• Forex volatility impacting margins; mitigation via localisation and hedging strategies.