Timken India shares have given a bullish move over the past year. During this period, the price of the Timken share rose from ??1040 to ??1,700 levels – registering an increase of around 65% during this period. However, Choice Broking sees a rise in the share price of this anti-friction ball bearing manufacturing company thanks to a record budget allocation to Indian Railways. Apart from this, Timken India acquired ABC Bearings which enabled the company to create new business opportunities of value ??450 crores to ??500 crore in the wheel segment. The brokerage report says the stock could go further than ??1702 to ??2,132.80 per share, or about 25% more in the long run.
Highlighting the fundamentals that could further support this rally in mid-cap stocks, the Choice Broking report said: “With a record budget allocation of ??1.1 lakh crore for FY22, total Indian Railways (IR) capital expenditure is expected to touch ??2.15 lakh crore in the financial year – the highest on record in a year. In accordance with announced plans, Indian Railways is expected to increase production of LHB coaches to 6,500 units in FY22. In addition, as coach modernization accelerates, older trains are gradually shifting to bearings at Tapered Cartridge Rollers (CTRB) while newer gears arrive with 100% CTRB. “
The Choice Broking report further states that in rail freight applications, Timken India Limited has a 50 percent market share. Mainly due to its low failure rate in the field, TIL is a technical partner for the freight corridor dedicated to Indian railways. High-speed trains are another area where TIL’s products will find a market and gain acceptance. With around two dozen metro projects lined up, India is massively seeking to expand metro rail coverage. TIL currently holds more than 60 percent of the market share of metro bearings with potential revenues of ??100 crore per year for the next five years.
Regarding the acquisition of ABC Bearings contributing to the expansion of the TIL market, the report from Choice Broking states: “After the acquisition of ABC Bearings, TIL gained access to a new market segment – the wheel segment. with a market size of ??450 to ??500 crores. After the Covid pandemic, the company can continue to grow in this segment because historically this market segment has been inundated with cheap imports from China. “
The brokerage report on Timken India Limited indicates that the company plans to enter the export market through its cylindrical and spherical roller bearings manufactured at the Baruch plant.
On its suggestion to long-term investors regarding Timken stocks, the Choice Broking report stated that this meter can be purchased from CMP ( ??1702 each) for a goal of 18 to 24 months of ??2,132.80 per share, or about a 25% increase over the long term.
Disclaimer: The opinions and recommendations expressed above are those of individual analysts or brokerage firms, not Mint.
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