SKP Bearing Industries: Navigating Global Headwinds with Strong Q2 & H1 FY26 Performance

SKP Bearing Industries Limited, a prominent player in the rolling elements sector, has unveiled its financial results for Q2 and H1 FY26, showcasing a robust standalone performance while actively integrating its strategic French acquisition. The company's latest investor presentation and conference call reveal a determined push towards capacity expansion, operational efficiency, and global market penetration, even as it navigates complex geopolitical and economic landscapes.

For Q2 FY26, SKP's standalone revenue from operations stood at 15.04 Crore. The quarter witnessed a significant uplift in profitability, with standalone EBITDA surging by approximately 40% quarter-on-quarter to 6.15 Crore. Profit After Tax (PAT) demonstrated an even more impressive leap, increasing by about 78% QoQ to 4.55 Crore. These figures translate into healthy standalone margins, with an EBITDA margin of 40.90% and a PAT margin of 30.25%. This strong performance from the India operations underscores the company's core operational strengths and efficiency.

On a consolidated basis, the company also reported substantial quarter-on-quarter improvements. Consolidated EBITDA grew by approximately 73% to 4.52 Crore, and consolidated PAT saw an extraordinary increase of about 692% to 2.98 Crore. However, management transparently acknowledged that consolidated margins were compressed due to the initial high operating costs associated with the French subsidiary, Valette & Gaurand Industries (VGI). This acquisition, while strategic for global reach, is currently in a turnaround phase, with the company actively working to optimize its cost structure and ramp up customer orders. The French entity contributed approximately 2 Crore to the revenue in Q2, though its performance was affected by global market fluctuations and seasonal holidays.

Strategic Initiatives and Capacity Expansion

SKP Bearing Industries is not resting on its laurels. The company is aggressively pursuing several strategic initiatives to fuel future growth. The integration of the French subsidiary is a key focus, with management aiming for EBITDA and PAT breakeven by Q4 FY26. Customer ramp-up in France is expected within 12-15 months, with a focus on stainless steel products that align with India's offerings. The French entity has already achieved approximately 20 Crore in revenue over 14 months (Feb 2024 to Mar 2025), a significant step from its pre-acquisition annual revenue of 7.5-8 Mn Euro.

In India, the company has completed a Capex of approximately 18 Crore in FY25, dedicating Plant 3 entirely to ball production, expanding its capacity to 2000 TPA. Plant 2 is now available for new product lines, supporting future growth. An additional 10 Crore capex is underway for roller capacity, targeting an increase from 100 TPM to 200 TPM by FY26 end. Furthermore, debottlenecking of heat treatment capacity from 250 TPM to 400 TPM is planned by Q4 FY26. These expansions are critical for meeting rising international demand and replacing imports, particularly from China.

Sustainability and Market Outlook

SKP is also making strides in sustainability through its participation in the PM-KUSUM scheme, which has started generating revenue from renewable energy. This initiative not only aligns with the company's ESG goals but also improves cost efficiency by leveraging self-generated solar and wind power. The company's commitment to green energy is a significant competitive advantage, reducing operational costs and enhancing its environmental footprint.

The market outlook for SKP remains positive. The company benefits from a diversified product portfolio, including needle rollers, cylindrical rollers, precision pins, and various types of balls, catering to a wide array of industries such as automotive, textile, engineering, aerospace, mining, railways, and even the evolving EV sector. Management expressed strong confidence in acquiring new customers and increasing wallet share from existing ones, backed by a dedicated marketing team exploring overseas markets and leveraging relationships with global OEMs. Despite global challenges, the company reports