Rolex Rings Q3 Results Review - Near Term Demand Softness: IDBI Capital

IDBI Capital Report

Rolex Rings Ltd. exhibited subdued performance in Q3 FY24 on the revenue front with numbers below our estimates. This was predominantly owing to lower than expected offtake in Q3 FY24 from a large domestic bearings customer which was faced with an inventory pile up issue owing to higher than expected offtake in Q2 FY24.

The management also mentioned that the top three bearing customers are facing some slowdown on the domestic front leading to deferral of certain plants being commissioned.

Certain bearing customers in the U.S. are also facing slowdown in demand to some extent. In light of the same, we lower our FY24/FY25/FY26 profit after tax by 8%/9%/11% to factor in lower growth. We maintain our 'Hold' rating on the stock with target price of Rs 2,500.

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