Shares of Timken India rose 10% to Rs 3,210 per share in intra-day trade on Thursday after the company plans to set up a new manufacturing facility to manufacture spherical roller bearings (SRBs), cylindrical roller bearings (CRBs) and other components at Bharuch in Gujarat.

Shares were up 8% at Rs 3,164 at 11:07 am, while the benchmark index fell 0.21%. Shares of Timken India have risen 71% in the past six months, compared with a 14% gain in the S&P BSE Sensex.

“Financing of the capital expenditure will be done through internal accruals. Commercial production is expected to start in January 2025. The manufacturing facility in Bharuch, Gujarat, will mainly produce tapered roller bearings (‘TRB’) and their components; another new factory will produce SRB, CRB and their components in the same factory will increase the company’s manufacturing capacity,” management said.

In addition, the company said adding new capacity will boost manufacturing capacity. Meanwhile, SRBs and CRBs will be used in heavy-duty and medium-speed industrial applications such as wind turbines, gearboxes, and mining and construction equipment.

Timken is working at maximum capacity utilisation in India. The company currently does not manufacture SRB and CRB in India. SRB and CRB are imported from Timken Group companies worldwide and sold in India.

Therefore, ICICI Securities analysts believe that localisation will help Timken expand its EBITDA margin as SRB and CRB have a good market in India.

“The company has launched a series of spin-off plans at the start of the new financial year, and the industrial market and customer demand are expected to remain strong. The government’s commitment to ‘Atmanirbhar Bharat’ and budget allocation for infrastructure will encourage bearing manufacturers to increase their local production capabilities manufacturing capacity,” the company added.

“According to market research, the global bearings market reached approximately $60 billion in FY2011, with India accounting for about 3% of the total global bearings market. Since bearings are integral to all equipment, the growing demand is a derivative. It has diverse applications across the global manufacturing sector, primarily the automotive and industrial sectors,” the company said.