SKF India Ltd is Rated Hold by MarketsMOJO

Current Rating and Its Significance

MarketsMOJO’s 'Hold' rating for SKF India Ltd indicates a balanced outlook where the stock is neither a strong buy nor a sell at present. This rating suggests that investors should maintain their existing positions while monitoring the company’s developments closely. The rating was revised to 'Hold' from 'Sell' on 01 Oct 2025, reflecting an improvement in the company’s overall profile, as evidenced by a 20-point increase in the Mojo Score from 40 to 60.

Here’s How SKF India Ltd Looks Today

As of 09 January 2026, SKF India Ltd presents a mixed but cautiously optimistic picture. The company’s financial metrics and market performance reveal strengths in certain areas, balanced by challenges in others. Investors should consider these factors carefully when evaluating the stock’s potential.

Quality Assessment

The company holds a good quality grade, supported by high management efficiency. SKF India Ltd boasts a robust Return on Equity (ROE) of 21.98%, signalling effective utilisation of shareholder capital. Additionally, the company maintains a low average Debt to Equity ratio of zero, indicating a conservative capital structure with minimal reliance on debt financing. These factors contribute positively to the company’s stability and operational soundness.

Valuation Perspective

From a valuation standpoint, SKF India Ltd is rated as very attractive. The stock trades at a Price to Book Value of 3.3, which is considered a discount relative to its peers’ historical valuations. This valuation level suggests that the market may be undervaluing the company’s assets and earnings potential. Despite this, the Price to Earnings to Growth (PEG) ratio stands at zero, reflecting a lack of earnings growth momentum, which tempers the valuation appeal somewhat.

Financial Trend Analysis

The financial trend for SKF India Ltd is currently negative. Operating profit has grown at a modest annual rate of 4.42% over the past five years, indicating slow expansion. The latest half-year results ending September 2025 showed some concerning metrics: operating cash flow was at its lowest at ₹203.09 crores, Return on Capital Employed (ROCE) declined to 27.18%, and the debtors turnover ratio dropped to 5.31 times. Furthermore, profits have fallen by 0.8% over the past year, despite the stock delivering a remarkable 100.89% return in the same period. This divergence between stock price performance and profit growth suggests market optimism may be driven by factors beyond current earnings.

Technical Outlook

Technically, SKF India Ltd is rated as mildly bullish. The stock has demonstrated strong momentum recently, with a 3-month return of 79.83% and a 6-month return of 78.24%. However, short-term fluctuations are evident, with a 1-day decline of 1.02% and a 1-week drop of 1.95%. The stock’s year-to-date performance shows a slight negative return of 2.12%, reflecting some volatility. Institutional holdings stand at a healthy 34%, indicating confidence from sophisticated investors who typically conduct thorough fundamental analysis.

Market Performance and Investor Considerations

SKF India Ltd has outperformed the BSE500 index over the last three years, one year, and three months, delivering market-beating returns. This strong price appreciation contrasts with the company’s modest profit growth and recent negative financial trends, highlighting the importance of cautious evaluation. Investors should weigh the attractive valuation and quality metrics against the financial headwinds and moderate technical signals.

What the Hold Rating Means for Investors

The 'Hold' rating advises investors to maintain their current positions rather than initiate new purchases or sell holdings. This recommendation reflects a balance between the company’s strengths—such as strong management efficiency, attractive valuation, and institutional backing—and its challenges, including subdued profit growth and recent negative financial trends. Investors should monitor upcoming quarterly results and market developments closely to reassess the stock’s outlook.

Summary of Key Metrics as of 09 January 2026

To summarise, SKF India Ltd’s key metrics include:

• Return on Equity (ROE): 21.98%


• Debt to Equity Ratio: 0 (average)


• Operating Profit Growth (5-year CAGR): 4.42%


• Operating Cash Flow (Yearly): ₹203.09 crores (lowest recent)


• Return on Capital Employed (ROCE): 27.18% (lowest recent)


• Debtors Turnover Ratio: 5.31 times (lowest recent)


• Price to Book Value: 3.3 (very attractive valuation)


• PEG Ratio: 0 (reflecting stagnant earnings growth)


• Institutional Holdings: 34%


• Stock Returns: 1 Year +100.89%, 3 Months +79.83%, 6 Months +78.24%

These figures illustrate a company with solid management and valuation appeal but facing headwinds in financial growth and cash flow generation.

Looking Ahead

Investors considering SKF India Ltd should weigh the company’s strong market performance and attractive valuation against its recent financial challenges. The 'Hold' rating reflects this nuanced outlook, signalling that while the stock is not currently a compelling buy, it remains a viable holding for those with an existing position. Continued monitoring of operational improvements and financial trends will be essential to determine future investment decisions.

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