NRB Bearings Share-Fundamental analysis for long term investment?

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In this post we will analyze all about NRB Bearings Ltd, their fundamentals, future view, company’s outlook, their financials, shareholding patterns etc , Based on company’s fundamentals and technical analysis, we will try to predict NRB Bearings share price target 2023,2024,2025 and 2030.

NRB Bearings share price target 2023,2024,2025-2030
NRB Bearings share price target 2023,2024,2025-2030

About NRB Bearings

NRB Bearings have pioneered in the manufacturing of needle roller bearings in India since 1965. More than 90% of the vehicles running on Indian roads are running on bearings manufactured by NRB.

The Company is engaged in the business of manufacturing ball and roller bearings having its applications in automotive sector as well as across all mobility applications.

NRB Bearings Share Price Target 2023: Technical Analysis

NRB Bearings Share Price Target 2023

YearNRB Bearings Share Price in 2023  
2023₹180  to  ₹210
NRB Bearings Share Price Target 2023

Company Overview

Company NameNRB Bearings Ltd
  
Company Websitewww.nrbbearings.com
  
Managing DirectorMr. Satish Rangani
  
Market Cap (Cr.) 1,452 
  
52 W High / Low₹ 186 / 107
  
Stock P/E20.2
  
Book Value₹  62.6
  
P/B (Price to Book Value)2.40
  
Face Value₹ 2.00
  
ROCE14.8 %
  
ROE13.7%
  
Dividend Yield 1.34%
  
NRB Bearings Financial Highlights

Business Overview:

NRB is the first company in India to produce Needle roller bearings. The company has for more than 6 decades been into evolving bearing technology and has offered a wide range of high precision friction solutions for automotive sectors and other mobility applications. 

Product portfolio
NRB has a leadership position in needle roller bearings, conventional cylindrical roller bearings, and also a new generation of lightweight drawn cup bearings. It also manufactures planetary shafts, crank pins, And kingpins. 

Their Product use:
Bearings manufactured by NRB find applications in diverse industries and vehicles such as Railways, defense, farm equipment, aircraft & aerospace applications, passenger cars, commercial vehicles, industrial 4-stroke engines, motorcycles, scooters, mopeds, and auto rickshaws.

Key Highlights:

NRB having a 60% market share in Needle bearing industry in India.

Segment-wise Market share

  • Almost 65-70 % of the domestic demand from OEMs and Tier I customers is met by NRB while the rest 12-15 % is supplied to aftermarkets.
  • Exports account for almost 20-25 % of OEMs & Tier I customers. However, no single OEM – Tier I customer accounts for more than 10-12 % of the total revenues thereby de-risking client concentration. 
  • During FY22, the co. introduced Light weighting of big end bearings with noise reduction. 
  • The Co. has successfully demonstrated friction reduction by 40% in big end bearings and introduced a needle bush for the FCEV supercharger battery management system. 

Restructuring Manufacturing capabilities
To Build a leaner and more flexible manufacturing structure with a focus on in-house toolroom and more insourcing for cost optimization, the company has undertaken the completion of the Long pending closure of the Thane plant and disposal of the Chikalthana facility at Aurangabad, which will be fully absorbed at their larger facilities.

Capacity Expansion
The co. has planned CAPEX Investments of Rs. 200 crores for the next 2-3 years (by FY24-25), including the expansion of two R&D facilities and Capacity expansion in the Thailand subsidiary by additional Capex investment of Rs. 35 crores over the next 2 Financial Years.

Redemption of NCDs
During FY22, the Company redeemed the listed Non-Convertible Debentures of the face value of Rs. 30 crores.

Future
The company is continuously investing in futuristic products as well as in the future platforms which they are co-developing. They are at the forefront of the launches of the world’s most advanced vehicles.

Industry Overview:

  • The Indian auto components industry is expected to reach US$ 200 billion in revenue by 2026.
  • India’s Automotive Industry is worth more than $100 bn and contributes 8% of the country’s total export and accounts for 2.3% of India’s GDP and is set to become the 3rd largest in the world by 2025.
  • As per the Automobile Component Manufacturers Association (ACMA) forecast, automobile component exports from India are expected to reach US$ 80 billion by 2026.
  • India is the world’s 5th largest vehicle market. India is expected to be the world’s third-largest automotive market in terms of volume by 2026.
  • The Electric Vehicles (EV) market is expected to grow at CAGR of 44% between 2020-2027 and is expected to hit 6.34 million-unit annual sales by 2027.

Growth drivers of the Auto comp industry:

  • Robust Demand:Growing working population and expanding middle class are expected to remain key demand drivers By 2025, 4 million of EVs could be sold each year and 10 million by 2030. The market is expected to reach US$ 206 billion by 2030.
  • Export Opportunities: India is emerging as a global hub for auto component sourcing and the industry exports over 25 percent of its production annually.
  • Policy Support : 100 per cent FDI allowed and no restrictions on import-export,  Government approved the PLI Scheme in automobile and auto components with an approved financial outlay over a five year period of Rs. 57,042 crores
  • Competitive Advantage: A cost effective manufacturing base which keeps cost lower by 10-25 per cent relative to operations in Europe and Latin America
  • Cost competitive: GST reduction in vehicles will spur demand, GST on Electric Vehicles reduced to 5 per cent from 12 per cent

Financial Performance Review

Pros:

  • Company has been maintaining a healthy dividend payout of 19.9%
  • FIIS holding is around 21% in the company
  • DIIS holding is around 12% in the company
  • 90% Indian vehicles run on their bearings
  • Company operating profit margin is 15%-16% YOY.
  • Company debt is under control, debt to equity ratio is 0.43
  • Promoter have increased their stake around 1% in the company

Cons:

  • The company has delivered a poor sales growth of 5.41% over past five years.
  • Company has a low return on equity of 10.8% over last 3 years.
  • Promoter have pledged 1.24% share.

NRB Bearings Share Price Target 2024-2025

NRB Bearings Share Price Target 2024

YearNRB Bearings Share Price in 2024  
2024₹240  to  ₹262
NRB Bearings Share Price Target 2024

NRB Bearings Share Price Target 2025

YearNRB Bearings Share Price in 2025  
2025₹310  to  ₹325
NRB Bearings Share Price Target 2025

Sandeep Jain Stock recommendations for NRB Bearings:

source: https://www.youtube.com/@ZeeBusiness

Credit Rating

As on March 31, 2022, the Company has been rated AA-/Stable for both short term and long term borrowings and A1+ for commercial paper.

NRB Bearings SUBSIDIARY/ASSOCIATE COMPANIES:

NRB bearings hold 73.45% equity in SNL bearings Limited whereas NRB Bearings (Thailand) Limited, NRB Bearings GmbH, and NRB bearings USA Inc are its wholly owned subsidiaries. All its subsidiaries are profit-making as on 31st March 2022. NRB Holdings, a wholly owned subsidiary, was incorporated on October 14, 2021, in Dubai, the United Arab Emirates for the growth of the global business.

(As on March 31, 2022)

Name of the SubsidiaryNRB Bearings (Thailand) LimitedNRB Bearings Europe GmbHSNL Bearings Limited (Rs. in Lakhs)NRB Holdings Limited (USA Inc)
The date since the subsidiary was acquiredMarch 31, 2007June 27, 2014June 1, 2000October 14, 2021
Profit after /(Loss) after taxationTHB 26 millionEURO 19,686INR 883USD (2,71,092
shareholding (%)10010073.45100
NRB Bearings Subsidiary companies

NRB Bearings Shareholding Patterns:

HoldingsYear 2022(Sept)%
Promoters49.90
FIIS21.32
DIIS11.76
Public17.02
NRB Bearings Shareholding Patterns

NRB Bearings Share Price Target 2030:

YearNRB Bearings Share Price in 2030  
2030₹730  to  ₹812
NRB Bearings Share Price Target 2030

NRB Bearings share FAQ

Is NRB Bearings share a good buy for long term?

Yes, NRB Bearings is a very good company, 90% Indian vehicles run on their bearings, for long term it is a good buy.

Is NRB Bearings a debt free company?

No, NRB Bearings have low debt, there debt are in control, company debt to equity ratio is 0.43.

Conclusion:

Overall, NRB Bearings is a good company managed by very experienced promoter. Company is market leader in their segment, and as they said around 90% of Indian vehicles run on their bearings. Promoter have also increased their stake in company that shows their confidence, therefore in coming future we can expect a strong growth in the company.

Source: NRB Bearings Annual Report and Internet

Disclaimer: On this page all the mentioned entries are based on the date the post was written, these could be change in future.

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