February , 2024
16:51 pm

Nandini Dasgupta

Company Profile

A subsidiary of the Timken Company, Timken India Limited began mechanical bearing production in India almost thirty years ago. It currently operates cutting-edge manufacturing facilities in Jamshedpur and Bharuch to meet the needs of the regional and global bearing markets. Through a network of approved distributors, the India team works directly with big Original Equipment Manufacturer’s clients and with end users to maximize performance and reliability through design and application advice. Timken is known for its highly collaborative technical selling methodology. Timken Technology centre in Bangalore offers clients access to cutting-edge technical expertise and latest technological advancements. The first state-of-the-art manufacturing plant was established in Jamshedpur in 1987 in accordance with international standards. Timken provides fuel-efficient, equipment life-extending, and performance-enhancing friction management technologies. 

Auto Anciallaries Sector in India

  •  The automotive component industry had a turnover of RS. 5.6 lakh crore (USD 69.7 billion) in the financial year 2022-23. The revenue of the industry increased by 32.8% compared to the same period last year. The Original Equipment Manufacturers supplies accounted for 66% of the total turnover of the industry, followed by the domestic aftermarket at 12% and exports at 22.3% in the same financial year.
  •  The auto components industry contributes 2.3% to India’s  Gross Domestic Product (GDP) and provides direct employment for 1.5m people. By 2026, the automotive component industry will account for 5% to 7% of India’s Gross Domestic Product (GDP). About 3.2m people will be directly employed in the automobile component industry by 2026 as per the Automotive Mission plan (2016-26).
  • Auto ancillaries’ revenue is expected to grow by 8 to 10% in FY23, according to ICRA. Between April 2021 and March 2022, the automobile component industry had a turnover of ` 4.2 lakh crore (approximately 56.5 billion USD). The auto components industry is projected to grow to USD 200 billion by the end of FY26 as per Automobile Component Manufacturers Association (ACMA ).
  •  From RS.1.41 lakh crore (USD 19 billion) in 2021–2022 to RS 1.61 lakh crore (USD 19.49 billion) in 2022–2023—a 5.2% increase in auto component exports. Europe and Asia, which make up 31% and 26% of overall exports, respectively, climbed by 3% and 4%, while North America, which makes up 32% of total exports, increased by 8%. Drivetrain and steering, engine parts, body and chassis, suspension, braking, and other components were among the main export goods.
  • The Indian car after market industry is projected to grow to US$ 32 billion by 2026. In 2022–2023, the car component aftermarket expanded by 15%, totalling ` 85,333 crore (US$ 10.33 billion). The aftermarket for automotive components in India increased by 15% between 2020–21 and FY22, from $8.70 billion to $10 billion. The domestic original equipment and aftermarket segments, along with strong international demand, supported the 20–23% growth in the Indian auto component business in FY22.
  • The Automobile Component Manufacturers Association (ACMA) projects that by 2026, exports of car components from India will total USD 30 billion. By 2026, the Indian car component sector hopes to generate $200 billion in revenue.

India holds a dominant position in the global market and is the world’s biggest producer of tractors, the second-biggest producer of buses, and the third-biggest producer of heavy vehicles. By 2026, it is projected that the Indian automotive sector, which includes component production, will generate between

Rs.16.16-18.18 trillion (USD 251.4-282.8 billion). The Indian auto industry saw a significant influx of capital from both indigenous and foreign producers. Between April 2000 and March 2023, FDI input into the sector totalled USD 34.74 billion.

  •  The Indian government announced a PLI scheme in February 2022, receiving investment proposals from 20 automotive companies for ` 45,016 crore, with an expected output of Rs.2,31,500 crore. The scheme aims to enhance manufacturing capabilities and exports. 
  •  Government’s initiative of issuing incentive to electric vehicle  (EV) manufacturer’s will further drive innovation and global excellence.

Company Perspective and Review

  •  Timken India has experienced growth in both equity and assets over the years. The company seems to have a conservative approach to debt, with no long-term borrowings. Fluctuations in certain liabilities and assets may indicate changes in business strategies, market conditions, or industry trends.
  •  Timken India’s Profit & Loss Account shows positive trends in revenue, profitability, and overall financial performance over the last five years. The company seems to be managing its operations efficiently, resulting in increased profits.
  •  Timken India’s declaration of a 15% dividend and its consistent dividend track record demonstrate a commitment to rewarding its shareholders. While the current dividend yield is relatively low, it’s important for investors to consider various factors, including the company’s financial health, growth potential, and their own investment objectives, when evaluating the significance of dividend yield in their investment strategy.

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