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SKF Bearings: Scaling down operations

The decision of SKF Bearings to scale down its operation may serve to underpin the weak trends in the stock price.

The company has indicated that due to the general downturn in the automobile industry and as a consequence of a sharp fall in some segments such as heavy commercial vehicles, it is lowering production levels at its Pune unit. SKF Bearings has also indica ted that this move would adversely affect the earnings performance in the October-December quarter. This may not lead to any sharp downside in the stock as an adverse performance across the sector has been priced in. But the formal indications may suppor t the current sluggish trend. -- BL Research Bureau