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SKF India – Results Update

October 19, 2007

The net sales have risen by 14% to Rs387.0 crore. The company benefited from the buoyancy in the industrial division where it was able to report a healthy top line growth against a slowdown in the automotive segment.

The operating profit margin has improved by 620 basis points to 17.6%, leading to a brilliant 76.5% growth in the operating profit to Rs68.3 crore. We believe that a better product mix in favour of industrial bearings and greater operational efficiencies triggered the margin growth.

The net profit has grown by 92.5% to Rs43.1 crore against our expectations of Rs37.2 crore. In view of the company’s brilliant performance, we are upgrading our CY2007 estimate by 9.2% to Rs30.1 and CY2008 estimate by 7.2% to Rs35.8.

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