FAG BEARINGS HAS MUCH TO GAIN FROM NEW AUTO EMISSION RULES

ET Intelligence Group: Implementation of stricter emission rules may pinch those who want to buy new vehicles, but for bearings companies, it is turning into an incremental revenue driver.

FAG BearingsNSE -0.70 %, India’s largest supplier of bearings to the passenger car segment, is well poised to benefit from increased demand for next-generation bearings which contribute to lower emissions by improving vehicle performance.

FAG Bearings, promoted by Germany’s S ..

With the deadlines on the emission rules — April 2017 for BS-IV and April 2020 for BS-VI — drawing closer, automakers are expected to shift to next generation bearings, opening up a revenue opportunity for the component makers. FAG Bearings is expected to reap the highest benefit since it is the market leader in the passenger car segment where volume visibility is the highest among all the automobile segments — its market share in the passenger car segment is expected to increase to 18.9% in 202 ..

FAG Bearings has commissioned a new plant at Savli in Gujarat with an investment of Rs 400 crore and it has potential to generate Rs 1,000 crore in revenue at peak utilisation. With higher utilisation of the new plant and increased proportion of the newgeneration bearings in its product mix could help the company boost its margins. Last year, its operating margin was 17.7%.

Also, the company would benefit from an expected increase in the use of technologically better bearings in trucks ..