SKF India Industrial booked Rs 192.61 crore demerger costs

SKF India (Industrial) Limited recorded Rs 192.61 crore of demerger expenses in the year ended March 31, 2026, led by Rs 163.92 crore of stamp duty including estimated land-registration transfer premium. SKF India Industrial also recognised Rs 3.49 crore for Labour Code-related gratuity, taking exceptional items to Rs 196.10 crore.

What made up SKF India Industrial’s demerger-related exceptional costs?

SKF India Industrial’s demerger-related costs were Rs 192.61 crore in the year ended March 31, 2026, comprising Rs 28.69 crore for information-technology costs and professional services and Rs 163.92 crore for stamp duty. The stamp-duty figure includes an estimated transfer premium payable to statutory authorities to transfer registration of land acquired under the Scheme of Arrangement.

The Rs 163.92 crore land-transfer and stamp-duty component represented the larger part of the Rs 192.61 crore demerger bill, while IT and professional services accounted for Rs 28.69 crore. Of that services component, Rs 16.02 crore related to the quarter and six months ended September 30, 2025, according to SKF India Industrial’s exceptional-items note.

The Rs 196.10 crore total exceptional charge was Rs 3.49 crore higher than the disclosed demerger expenses. SKF India Industrial attributed that additional amount to incremental gratuity arising primarily from a changed wage definition under the new Labour Codes, rather than to the separation process itself.

When did SKF India Industrial’s demerger become effective?

SKF India Industrial’s demerger became effective on October 1, 2025, after the National Company Law Tribunal, Mumbai Bench, approved the Scheme by an order dated September 26, 2025. The certified order was filed with the Registrar of Companies on October 1, 2025, which was also the mutually fixed appointed and effective date.

Under the Scheme, the industrial undertaking was transferred from SKF India Limited to SKF India Industrial on a going-concern basis, with assets, liabilities and retained earnings recorded at their existing carrying values. SKF India Industrial allotted 49,437,963 fully paid equity shares of face value Rs 10 each to shareholders on the October 15, 2025 record date.

The share exchange ratio was 1:1: shareholders received one SKF India Industrial share of face value Rs 10 for every one share of the demerged company with the same face value. SKF India Industrial’s equity shares were subsequently listed on BSE and NSE on December 5, 2025.

The Rs 163.92 crore stamp-duty charge includes an estimated statutory transfer premium connected with effecting the registration transfer of land acquired under the Scheme. SKF India Industrial recorded that estimated premium within exceptional items during the year ended March 31, 2026.

Why are SKF India Industrial’s historical figures not independently audited?

SKF India Industrial’s comparative figures for periods before October 1, 2025 were extracted by management from SKF India Limited’s financial information for the industrial undertaking and were not audited or reviewed by SKF India Industrial’s statutory auditors. This applies to the quarter and six months ended September 30, 2025, and the April 1 to September 30, 2025 period included in the financial results for the year ended March 31, 2026.

The restatement follows Appendix C to Indian Accounting Standard 103, Business Combinations, and begins from SKF India Industrial’s December 17, 2024 incorporation date. Management certified the extracted historical figures, while statutory auditors issued an unmodified review conclusion on the quarter and six months ended September 30, 2026 results approved on November 4, 2026.

This distinction affects period comparisons. Revenue from operations for the six months ended September 30, 2026 was Rs 2,013.63 crore, compared with Rs 1,633.69 crore for the six months ended September 30, 2025, but the earlier figure is drawn from the demerged undertaking’s financial information rather than a separately audited SKF India Industrial account.

SKF India Industrial also accounted for Rs 55.66 crore of tax expense on profits for April 1 to September 30, 2025 during the year ended March 31, 2026. SKF India Industrial said this treatment reflected the National Company Law Tribunal-approved scheme because those profits arose before the October 1, 2025 appointed and effective date.

How did the exceptional costs relate to SKF India Industrial’s latest results and cash flow?

SKF India Industrial reported no exceptional item in the six months ended September 30, 2026, compared with Rs 16.02 crore in the corresponding six months ended September 30, 2025. The earlier charge was part of the Rs 28.69 crore demerger IT and professional-services expense recognised during the year ended March 31, 2026.

For the six months ended September 30, 2026, profit before tax and exceptional items was Rs 221.29 crore, versus Rs 230.49 crore a year earlier. Revenue from operations increased by Rs 379.94 crore year on year to Rs 2,013.63 crore, while the earlier-period comparison remains subject to the management-extracted basis described in the notes.

Net cash from operating activities before exceptional items was Rs 43.15 crore in the six months ended September 30, 2026, down from Rs 167.77 crore in the prior-year period. As no exceptional cash item was reported in the latest six-month period, net operating cash flow after exceptional items was also Rs 43.15 crore, compared with Rs 151.75 crore a year earlier.

Cash and cash equivalents stood at Rs 318.38 crore on September 30, 2026, compared with Rs 569.17 crore at March 31, 2026. During the six months, SKF India Industrial reported Rs 162.04 crore of payments for property, plant and equipment including capital work-in-progress, and Rs 148.35 crore of dividend paid.

Conclusion

SKF India Industrial’s exceptional items for the year ended March 31, 2026 were principally separation costs: Rs 192.61 crore of the Rs 196.10 crore total related to the demerger, and Rs 163.92 crore of that demerger amount concerned stamp duty and estimated land-registration transfer premium. The remaining Rs 3.49 crore exceptional item related to incremental gratuity under Labour Code considerations.

The next disclosed uncertainty is the finalisation of Central and State rules and government clarifications on the Labour Codes. SKF India Industrial said it will monitor those developments and record an appropriate accounting effect if required, while the estimated land-transfer premium remains included in the Rs 163.92 crore stamp-duty charge already recognised.