Timken India reported 13.8% YoY revenue growth in Q3 FY’26, reaching INR 764 crores, despite one-time impacts affecting profit before tax (PBT). Management detailed the transitional impacts, including the Labor Code effect and ramp-up costs from the new Bharuch plant. Focus remains on strategic execution, capacity stabilization, and leveraging favorable trade developments for medium-to-long-term growth and margin recovery.
Q3 FY’26 Financial Performance Overview
Timken India Limited announced its Q3 FY’26 results, demonstrating strong top-line performance. Revenue from operations for the quarter stood at INR 764 crores (INR 7,644 million), marking a 13.8% increase year-over-year (YoY). Sequentially, revenue saw a slight dip, attributed to the seasonality in the rail business.
Profit Before Tax (PBT) for the quarter was INR 719 million, which was lower YoY and sequentially due to several one-time transitional impacts. These included the Labor Code related impact, a reduction in other income due to lower investable surplus, and the initial ramp-up costs of the new Bharuch plant. Management estimated that excluding these exceptional items, PBT would have been close to 13% higher, primarily due to an unfavorable product mix compared to the prior year.
For the 9 months ended Q3 FY’26, total revenue reached INR 2,346 crores, reflecting nearly 6% YoY growth. PBT for the nine-month period stood at 13.8% versus 15.9% last year, similarly impacted by transitional costs.
Segmental Revenue Breakdown (Q3 FY’26)
Management provided a detailed breakdown of the quarter’s revenue performance:
- Rail: INR 128.6 crores
- Mobile, Others: INR 157.1 crores
- Distribution Business: INR 138 crores
- Process: INR 167 crores
- Export Intercompany: Close to INR 159 crores
- Export Incentives: INR 4.4 crores
Bharuch Facility Update and Capacity Utilization
Regarding the new Bharuch facility, Mr. Sujit Pattanaik confirmed that all lines (SRB and CRB) are capitalized, leading to the full depreciation impact being recognized this quarter. The facility generated moderated sales of INR 12 crores to INR 15 crores in Q3. The focus is now on accelerating customer PPAPs for commercial sales.
On utilization, management noted they are not at 45%, estimating the current level to be around 30%. The expectation is to achieve a sizable utilization over 50% by the end of Q4 FY’26 and Q1 FY’27. Chairman Sanjay Koul emphasized that future acceleration will be significantly aided by recent geopolitical developments, specifically favorable trade comments from India, the U.S., and Europe.
Margin Recovery and Future Outlook
Addressing margin compression, management attributed the gross margin impact to an unfavorable mix (trading vs. manufacturing) and incremental costs at the Bharuch plant. The impact of the Bharuch ramp-up cost was estimated at 170 basis points, with an additional 60 basis points from the Labor Code impact.
The goal remains achieving operating margins in the 17% to 18% range. This recovery is heavily contingent on quickly ramping up the Bharuch plant, which leverages high operational leverage due to fixed costs in Indian manufacturing.
Other Key Points
- Commercial Vehicles (CV): The segment showed acceleration, growing 9% quarter-over-quarter and 20% YoY, reaching INR 157 crores.
- Rail Business: Growth remains expected to be slow and steady, despite Q3 being the lowest quarter (INR 128.6 crores). Future government infrastructure spending is expected to sustain this segment.
- GGB Acquisition: For the last financial year, the acquired GGB Technology Private Limited reported revenues of INR 50 crores with a PBT of nearly INR 19.5 crores.
- Linear Motion Products: Discussions are actively underway for manufacturing Linear Motion Products in India, encouraged by the global CEO’s focus on Industrial Motion Products.
Source: BSE
