SKF Bearings' CP rating reaffirmed

THE INVESTMENT Information and Credit Rating Agency (ICRA) has reaffirmed the A1 plus rating assigned to the Rs. 50 crore commercial paper programme of SKF Bearings (India) (SKF). The rating indicates highest safety in the short term. The rating takes into account SKF's strong parentage, its leadership in the bearings industry and comfortable liquidity position.

SKF manufactures deep groove ball bearings, taper roller bearings and hub bearings at its facilities at Pune and Bangalore. While these products cater to different industries, a major percentage of its sales are to the automobile and auto ancillary industries. Despite the slowdown in industrial growth - particularly the automobile sector - SKF achieved a 3 per cent growth in sales during the year ended December 31, 2000. The impact of Rs. 27.80 crores of extraordinary income on account of the sale of property was offset by a provision of Rs. 23.50 crores for VRS at the Pune plant. Consequently, the net profit for the period was lower than that for the preceding nine month period (April-December 1999).

Sales during the first quarter of 2001 dropped by 9 per cent as compared to the corresponding period in 2000. While sales to OEMs improved during the last three months, sales in the more remunerative replacement market continue to remain depressed, leading to lower operating margin during the period.

Corporate Bureau

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Section  : Business
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