The Hindu Business Line : NRB Bearings up on value pick

NRB Bearings, which closed at Rs 488.05 on the BSE, has gained 3.12 per cent since last one month as a value pick by some marketmen. Today, however, after opening sharply higher at Rs 519, the stock closed at Rs 488.05, down 2.18 per cent over the previous close of Rs 498.95, in line with general market condition.

The company, which may gain from demand growth in both domestic and export markets, is expected to see its net profit rise at a CAGR of 20-22 per cent over the next three years, feel analysts. Also, fresh capex may take care of its capacity challenges. Production capacity is slated to rise, seen to be adequate for catering to incremental demand up to 2008-09, said analysts.

While trading volumes are markedly low (only 480 shares were traded on Friday), the stock trades at roughly 12x and 9x fiscal 2007 and fiscal 2008 estimated earnings respectively. The stock witnessed a trading volume of 46,000 shares on Monday.

However, any major downturn in the two-wheeler market could affect the company's earnings prospects, it is warned.

Nilanjan Dey

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