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SKF Bearing gains momentum

Deeptha Rajkumar

SUSTAINED support on the part of institutions and operators saw the stock of SKF Bearing Ltd gain momentum on the bourses on Friday.

The stock ended the day at Rs 72.85 up 13.56 per cent with around 4.1 lakh shares traded on the BSE.

On the NSE, the stock closed at Rs 71.95 up 11.46 per cent with around 6.67 lakh shares traded.

Brokers said that there was no specific reason for the counter having gained strength but attributed it to being part of a broad market rally.

"There was good buying by the FIIs in the market today. And given that SKF is an institutional stock, the counter also benefited from their broad based support,'' a broker said.

A moot point to note is that Friday's volumes on the BSE are five-seven times the normal average witnessed at this counter. The stock has been hovering in the Rs 60-70 range over the past three months.SKF Bearing is the market leader in bearings with a 28.3 per cent market share. The company is aiming to be a service provider from a provider of components. It is also reportedly looking at joint ventures or acquisitions to provide value-added solutions to its clients.

According to market analyst Mr Arun Kejriwal the company is a good turnaround story. "The bearings industry is currently doing well. And with India increasingly being looked upon as a outsourcing hub by many overseas companies, one could construe that companies with large foreign promoter holdings such as SKF Bearings would also be looking at a similar future,'' he said.

Mr Kejriwal also said that warrants issued by the company are due for conversion in December. A leading domestic broking house that has a buy on the stock has forecast an EPS of Rs 6 for the full year as against Rs 4.50 last year."At these levels, the valuations are not steep. And over the next 6-8 months we are looking at a price target of Rs 90. The downside should remain restricted at Rs 60,'' sources said.

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