Mumbai: SKF plans to expand its production capacity as soon as possible as all its manufacturing plants are running at full capacity, said Bhatnagar, Managing Director of Swedish bearing maker SKF India.

“Unfortunately, we have to turn down orders because we are running at full capacity and we need to invest in capacity (expansion) quickly,” he told The Economic Times. Bhatnagar said the company is looking at greenfield and brownfield options to increase production capacity.

He did not disclose the amount of capital to be spent on capacity expansion, but said the company will continue with the Rs 10-1.5 billion capital expenditure planned for the current financial year.

SKF India and its subsidiaries have six plants in India. The company resumed production earlier this year after the relaxation of the coronavirus embargo ahead of competition and managed to win key customers and market share, Bhatnagar said. The bearing and lubricant maker restored order to its workforce and supply chain in May, he said.

The company is now running three shifts a day, 77 days a week, at its factories to meet demand. necessary.

The bearings and lubricants manufacturer receives the bulk of its demand from the automotive industry, despite an increase in car sales during Diwali. This segment accounts for nearly half of SKF’s sales in India. This is an increase from about 45 percent previously. The balance comes from weaknesses in the industrial bearings segment.

However, Bhatnagar said that the industrial bearings business is expected to recover in the coming months, especially in the railroads, due to the government’s infrastructure drive.

However, the company’s share price does not reflect the recovery in sales. Bombay Stock Exchange, SKF Since the beginning of the year, the shares of the Indian company have fallen more than 23%, closing at 1, 678 rupees on Friday. Over the same period, the benchmark Sensex rose 13.7 percent.

Among its peers, rival Schaeffler India’s shares have fallen 8.4% over the same period, while Timken India and NRB Bearings’ shares have risen 24.3% and 2.9%, respectively.

ICICI Direct analysts reported on October 29 According to the daily, SKF India’s overall revenue is expected to grow at a 5.3% compound annual growth rate (CAGR) between 2019-20 and 2021-22. However, revenues are expected to decline in the current financial year as compared to last year. A decrease of 12%. The report says, “The stock is currently trading at 25 times FY2022 P/E with little upside.”

Rising raw material prices could erode the company’s margins in the coming quarters. Bhatnagar said SKF expects steel prices to rise 5-8% in the next fiscal. Depending on market conditions, the company may absorb some of the cost increase and pass some of it on to customers, he said.