Thread by @bastionresearch

Overview of INDIAN BEARING INDUSTRY:
In human body if we have pain in joints it becomes difficult to move some parts. Similarly bearing is important to move machines. Maybe it can be small or big in size but its immensely important.

Bearings are broadly divided into 2 Parts Ball bearing and Roller. Both have different application and load capacity. In simpler terms Roller are used for comparatively heavier machineries and can handle higher loads.

As of CY19, size of Domestic Bearing Industry is 10,000cr with a 5.3% CAGR in last 10yrs. It’s a MNC dominated market where 50%+ is owned by them.

Government is taking multiple initiatives to improvise Railway Industry and Bearing industry is becoming a indirect beneficiary because of it

Every industry has certain important pointers to keep in note like barriers to entry, structural change, government regulation etc.

Similarly there are 5 points to know about bearing industry

As MNC leads the industry, lets focus on who focuses on which type of bearing and how revenues is divided and how domestic and international sales are doing.

Schaeffler & Timken sources 70%+ raw material from India leading to better gross margins compared to SKF

Over time industry shows some cyclicality in margin, the reason is their sales are correlated to auto industry. SKF has comparatively lower margin due to lower gross margins.

Its important to know how company utilizes the money they earn. SKF, whose sales growth is low distributes money to shareholders whereas others focus on capex

At last its important to what can trigger growth in industry as well as what can be the potential risk that can hinder the growth

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