Rs 546 to Rs 4,155: This stock delivered multibagger returns in five years, closed lower in previous session

Shares of Timken India have delivered multibagger returns in five years. Timken India shares which closed at Rs 546.1 on May 17, 2019 ended at Rs 4155 on May 18 this year, delivering 661% returns during the period. Shares of the bearings manufacturer ended 1.26% lower in the previous session. Market cap of the multibagger stock fell to Rs 31,255 crore on BSE.

Total 450 shares of the firm changed hands amounting to a turnover of Rs 18.82 lakh on BSE. 

Timken India shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The stock has gained 113% in two years and risen 226% in three years.

In terms of technicals, the relative strength index (RSI) of the stock stands at 84.1 signaling it's trading in the overbought zone.

 Centrum Broking has a sell call on the Timken India stock with a target of Rs 2665.

“The company is confident of maintaining EBIDTA margin around current level (range 19-19.5%). We have taken note of these development and revised earnings estimates upwards for FY25E/FY26E by 8.7%/9.3% respectively. We maintain our target earnings multiple at 42x. We roll over to FY26E EPS of Rs63.4 and arrive at TP of Rs 2,665 (earlier-Rs2,297) and maintain Sell on the stock,” said the brokerage.

 Abhijeet from Tips2trades said, "Timken India stock price is  bullish but also very overbought on the Daily charts with next resistance at Rs 3770. Investors should keep booking profits as Daily close below the support of Rs 3416 could lead to a fall till Rs 2841 in the near term."

Kotak Equities has assigned an add rating to the stock post Q4 earnings.

"We remain constructive on the medium-term growth prospects of the company driven by (1) increased capex spends on railway segment demand, (2) newer opportunity in CRB and SRB segments and (3) the parent entity’s focus to improve exports out of India. Retain ADD rating on the stock," said the brokerage.

Kotak expects revenues of overall Timken’s business to grow at 16% CAGR over FY2024-27E.

Net profit climbed to Rs 141.4 crore in Q4 against Rs 104.5 crore in March 2023 quarter. Revenue rose to Rs 908.5 crore in the last quarter against Rs 809.2 crore in March 2023 quarter.   

The Board has recommended dividend of Rs. 2.5/- per equity share of Rs. 10 each fully paid up for the year ended 31 March, 2024. 

Timken India Limited is engaged in the manufacture of bearings, gears, gearing, and driving elements. The company has one primary segment such as bearings and allied goods and services for the automotive sector and the railway industry. It is into manufacturing, distributing, and sale of anti-friction bearings primarily tapered roller bearings, other roller bearings, components, accessories, and mechanical power transmission products for the diverse customer base.