SNL Bearings Ltd. (SNL) is one of the leading Needle Roller Bearing manufacturers mainly catering to the automobile industry. For more than two decades, it has been remained one of the leading suppliers to various big names in Automobile manufacturing like Bajaj, LML, Maruti, Tata Motors, etc. In addition, it also manufactures some industrial bearings which are used in Textile machinery and household appliances. SNL has a capability of manufacturing it’s own special purpose machines required for manufacturing bearings which enables SNL to be a cost-effective manufacturer.
- High Promoter holding at 74.39%. The shareholding has been increasing steadily from the past few quarters.
- The company has a history of reducing debt, taking it to a manageable level and then again increasing it for expansion. They have managed this cycle very well.
- The current debt to equity ratio is at a comfortable level at 0.38.
- Last 3 years average annual ROE stands at 53.74%.
- Positive cash flows in the last five years enough to take care of investing activities as well as partially reducing the debt.
SNL is currently available at a market price of Rs. 198. This translates into a trailing PE of around 12.20. The promoter company NRB Bearings Limited which is in the same industry trades at a PE of around 24. While SNL is already a two bagger in the last year, it still appears to be very attractive at current levels. As stated earlier, the promoters have been raising their stake in the company every quarter. That in itself speaks a lot!