NRBBEARING - NRB Bearings Ltd. Share Price

In the earnings call for Q3 FY 2025-26 held on February 13, 2026, Harshbeena Zaveri, Vice Chairman and Managing Director of NRB Bearings Limited, shared a positive outlook for the company, indicating a strong desire to grow and diversify its operations.

Key financial highlights include:

• Q3 revenue reached INR 328 crores, an 18% year-on-year increase.
• EBITDA grew by 26% to INR 64 crores, with margins improving to over 19% compared to approximately 17-18% in the same period last year.
• Profit after tax, before exceptional items, rose by 44% to INR 38 crores.
• For the nine-month period, revenue totaled INR 963 crores, a year-on-year increase of 11%.

The management highlighted significant forward-looking points:

1. Expansion into industrial bearings through a joint venture with Unitec, where NRB holds a 75% stake. This will leverage Unitec's engineering depth and customization capabilities, primarily focusing on precision products for various industries including defense and aerospace.
2. Entry into the aerospace sector via the acquisition of Mahant Toolroom, a company known for its precision machining capabilities, with an order book exceeding INR 25 crores.
3. An optimistic growth perspective as NRB positions itself to tap into high-growth areas like aerospace, defense, and industrial applications.
4. Aiming for a long-term revenue target of INR 2,500 crores by 2031, implying a compound annual growth rate (CAGR) of around 12%.

Management expressed confidence in leveraging their established relationships with premium OEMs (original equipment manufacturers) and their focus on high-margin segments. They underlined their commitment to maintaining EBITDA margins between 18% and 20% despite anticipated growth, emphasizing a disciplined approach to capital allocation and operational excellence.

Question: Shreyans Gathani: "What would be the inventory levels, and where are we with the inventory reduction that we are targeting?"

Answer: Our inventory has improved from 120-130 days historically, down to 110 days now. Ideally, we aim for 90-100 days. Given our major customer base, we need to hold this inventory to ensure reliability, especially post-COVID. While there's room for improvement, no we cannot drop below 90 days without risking our relationships with customers. This strategy directly enhances our pricing power and maintains confidence in our supply reliability.

Question: Shreyans Gathani: "On additional capacity, what is the timeline on how we are building capacity and when it's going to come up?"

Answer: We're enhancing our capacity without traditional constraints. We continuously track production improvements and have balancing capacities in place to meet demand fluctuations. Our goal is not to be limited by our existing capacity; with current innovation, we can produce about 15% more than stated capacity. The machinery required for balancing capacities is acquired gradually, some taking about a year, enabling us to maintain production levels efficiently.

Question: Rajas Joshi: "Could you please break down, give a revenue mix of our revenue across different segments, be it domestic and exports?"

Answer: Currently, our revenue mix is approximately 75% domestic and 25% export. Although our U.S. business has seen a dip, it should maintain a stronger presence once recovery occurs. In segments, commercial vehicles comprise 27-30%, two-wheelers account for about 30%, and industrial is rapidly growing from 8-12%. Other segments like aftermarket remain stable at 10-12%, and passenger vehicles are consistently around 20%.

Question: Dev Gulwani: "What will be the market size of needle and cylindrical bearings in the INR20,000 crores Indian market?"

Answer: It's challenging to provide a precise size for needle and cylindrical bearings. While we hold a dominant share, the market size varies widely based on specific application needs. Our current focus remains on high-volume products dominating the automotive and industrial sectors as we plan to expand into larger bearings in the next year; however, exact figures remain proprietary.

Question: Raghunandhan NL: "Can you indicate what was the growth for aftermarket and exports on a Y-o-Y basis?"

Answer: Our exports have remained consistent at 25% of revenue year-on-year. However, the aftermarket has seen downturns due to market volatility. Fortunately, our model isn't heavily reliant on the aftermarket since we provide high-quality products that don't frequently fail. This stability allows us to pivot to other sectors when demand in aftermarket weakens, mitigating risks substantially.

Question: Apoorv: "How much total capex is required for the Unitec JV, and by when will it be commercialized?"

Answer: The total capex for the Unitec JV is around INR110 crores. We expect significant production by 15-18 months after equipment orders are fulfilled and operationalized. Our strategic partnerships and investment in advanced machinery will facilitate quicker and more efficient production cycles, enhancing our capabilities once fully functional.

Question: Saket Kapoor: "What should be the trajectory for our EBITDA margin going ahead? Are these the peak margins?"

Answer: We aim to maintain our EBITDA margins within the 18%-20% range, accounting for cyclicality and business performance. The margins reflect operational efficiencies and market conditions, and we anticipate progression but will adjust based on segment profitability. Overall, maintaining this band is central to our growth strategy and financial health.

Question: Garvit Goyal: "Are we targeting EBITDA margin over 20%, and how are we strategizing to achieve this?"

Answer: Yes, our goal is to maintain or exceed current EBITDA margins even as we grow. Our initiatives in high-margin sectors, such as aerospace, have excellent potential for 30% margins, while expansions in lower-margin segments, like automotive wheels, might yield around 16%-17%. We ensure strategies are in place to not just grow revenue but also optimize margin retention.

This summary captures the core of the Q&A session while adhering to your character constraints.