 "Mukund Vasudevan, president, India and Southeast Asia, and managing director of SKF India (Industrial)")
SKF India’s new and demerged industrial unit is aiming for aggressive growth, projecting it will nearly double its revenue within five years as it completes a major investment cycle and boosts operating profit.
The industrial business, which became a standalone entity after SKF India carried out a statutory demerger effective October 1, is set to list on stock exchanges on December 5. Under a court-approved scheme of arrangement, existing shareholders received one share of SKF India (Industrial) Ltd for every share held in SKF India Ltd. The demerger split the operations into two focused entities — SKF Automotive and SKF India (Industrial) — with the stated objective of sharpening sector-specific strategies and unlocking shareholder value.
The industrial business posted revenue of around Rs 2,600 crore in FY25 and it could scale to about Rs 4,500 crore over the next five years, driven by economic growth and market share gains, Mukund Vasudevan, president, India and Southeast Asia, and managing director of SKF India (Industrial), told Business Standard.
Growth will be underpinned by a capital expenditure (capex) programme through the end of the decade. The industrial business plans to invest Rs 800-950 crore through 2030, with the bulk of the spending directed at expanding manufacturing capacity. “Out of roughly Rs 900-950 crore of planned capex, about Rs 600 crore or a little more will go towards the new plant by 2028, fully focused on the industrial business, with state-of-the-art equipment and Industry 4.2 digital technologies,” Vasudevan said.
In the near term, SKF India (Industrial) expects to spend around Rs 250 crore annually on routine growth and capex, a level that will be sustained over the next three years. A plant planned in Pune is expected to improve asset utilisation, throughput and cost efficiency, enabling the company to better serve customers across sectors such as railways, wind energy, defence, cement, metals and emerging areas like data centres and machine tools.
The company does not expect the investment programme to strain its balance sheet. “We will fund the entire capex internally. We have always been a very good cash-generating company and will not have to raise any external funding,” Vasudevan said.
While the heavy capex cycle will keep margins under pressure in the near term, management expects a clear improvement once major investments are completed. “In the near term, because we are in a heavy capex cycle, ebitda margins will remain around 12–13 per cent, but from 2028 onwards we expect margins to increase and get back to the 17–19 per cent range,” he said, referring to earnings before interest, taxes, depreciation and amortisation.
Vasudevan added that the demerger allows a sharper operational and manufacturing focus, as industrial customers have distinct product requirements and cycle times compared with automotive clients. “Manufacturing lines will be developed and designed specifically to serve industrial markets, which have different products, different cycle times and different innovation needs,” he said.
The industrial business currently derives roughly 55 per cent of its revenue from the aftermarket and 45 per cent from original equipment manufacturers, a mix that management expects to broadly maintain. With infrastructure spending, energy transition projects and defence manufacturing gathering pace, SKF India (Industrial) is betting that focus, scale and technology-led investments will translate into sustained growth and higher profitability in the years ahead.
