SKF India, a Rs 1,620 crore turnover company that makes bearings and seals used by industries, suffered from the industrial slowdown. The March’09 quarter saw a continuation of a factory shutdowns, reduction in shifts in various sectors, as companies adjusted production schedules in line with declining demand. Automobile makers have cut production, particularly among commercial vehicles, affecting purchases. A general decline in other industries too seems to have affected demand for bearings.
SKF’s sales fell by 19.4% to Rs 315.8 crore in the March’09 quarter, compared to the corresponding previous period.
The company seems to have been lowering inventory, judging by the reduction in stock in trade. Total raw material consumption has dipped by 11%.
Though SKF has tried to mitigate the effects of the slowdown it has only been able to do so much. Even after keeping employee costs steady, cutting production and lowering other expenditure by 22%, its net profit decline by 61.7% to Rs 14.5 crore.
The share price fell by 5.2% to Rs 168 as investors were disappointed by its results.