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Highlights

* Founded in 1965, NRB was the first company to manufacture needle roller bearings in India. For over 40 years NRB has pioneered the leading edge of bearing technology, and today over 90% of vehicles on Indian roads run on NRB parts. Since its inception, NRB has grown beyond its signature product to offer a wide range of high-precision friction solutions not only in the automotive sector, but across all mobility applications.

* NRB is the global benchmark for quality and innovative design in high-precision friction solutions. NRB Bearings is a recognized leader in needle roller bearings, conventional cylindrical roller bearings and has developed a new generation of lightweight drawn cup bearings.

* In 2000 NRB established a dedicated Engineering & Design Centre at Rabale, which has since been recognized by the Indian Department of Science & Technology as a world-class research and development facility. Over the past decade the Engineering & Design Centre has remained on the cutting edge, and it is equipped with state-of-the-art design and modeling software, benchmarking equipment, and testing and simulation facilities.

* At NRB, their expertise and knowhow covers the full range of bearing design, from conception to simulation, validation and production. In addition to using the most advanced professional modeling software, they also design their own customized software and machinery. Their Engineering & Design Centre uses analysis software, simulation software and testing rigs that have been designed and produced in-house. Their plants use automated production and assembly machinery designed by their own engineers.

* Their innovative approach and focus on for high-technology products, consistent quality, performance levels and cost competitiveness leads them to be an engineering differentiated Company. This advantage further enhances the geographical and locational advantage. The cultural advantage of a less hierarchical, flatter organization with a collaborative working style is an additional distinct advantage which can be leveraged for global expansion as a strategy

Consistent Operating Performance

* During the year on a consolidated basis, Company recorded net revenue from operations (net of taxes and incentives) of Rs. 9,442 millions as against Rs.7,624 millions for the last fiscal. The Company recorded a net profit of Rs.756 millions, an increase of 35.7 per cent over Rs. 557 millions for the last fiscal. EBITDA Margins to improve as steel and others raw material prices are cooling down in global market which will further improve the operational margins.

* The Company along with its subsidiaries, with agility and speed has been steadily investing in and developing innovative process technology and building / customizing its machines for low volume, custom-designed products and high range production techniques and is leveraging its fast-paced, on-going investment.

* This approach has led NRB to become the first choice supplier for EV and EV agnostic friction solutions the world over. NRB is leading the way by supplying its global customers in 45 counties and is now a key supplier in advanced mobility applications that will revolutionize and propel the Indian auto component industry forward both domestically and internationally.

* NRB’s focus and embracing of future technologies along with re-inventing and altering its capabilities has led the Company to supplying the world’s foremost E-Vehicles. We valued NRB at Rs 190 i.e. 17x P/E on FY24E EPS. We initiated a BUY on NRB Bearings Limited.

Future Prospects

* They have gained market share in their ‘chosen’ segments even in the last quarter and dominate the global truck segment.

* NRB offers a very cost-effective solution for conventional / Hybrid and EV in Truck segment and now is becoming a force in the global Farm Equipment business

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

* They are cautiously optimistic and hope that demand revival they are seeing currently continues going forward

* NRB is supplier to

* The world’s foremost E-Vehicles, in Europe, America and Japan (through NRB Thailand) and Korea (through the Hyundai Group).

* Nominated by the leading players globally in their new electric power trains.

* Present in virtually every light to heavy vehicle - for hybrid and EDrive in Europe and America and in China.

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