Auto Ancillary Stock Jumps 6% After Foraying into Aerospace Sector

Synopsis: An auto components stock that has been trading significantly below its industry PE has significantly surged after the company announced its entry into the aerospace sector by acquiring Mahant Tool Room,  a Bengaluru-based precision engineering company

A small-cap stock engaged in the manufacturing of needle roller bearings surged 7 percent after the company announced that its subsidiary has acquired a Bengaluru-based aerospace components making a strategic entry into the aerospace sector

With a market cap of Rs 2,442 Cr, NRB Bearings Ltd saw its stock hit an intraday high of Rs 252 which is more than 6 percent higher than the previous close of Rs 237. 

The company’s stock has given a compounded return of 18 percent in the last 3 years, while the one year number is at negative 3 percent. The company stock has been trading around 17 which is lower than its Industry PE of 26.

News

NRB Bearings Limited has completed the acquisition of Mahant Tool Room through its wholly owned subsidiary, Mahant Tool Room Private Limited, marking a key strategic milestone. The Rs 27.5 crore upfront cash acquisition enables NRB Bearings to enter the aerospace segment, expanding beyond its core automotive and industrial bearings business. The move represents a clear diversification strategy into a technology-intensive and high-growth sector.

Mahant Tool Room, a Bengaluru-based precision engineering company, brings an order book of over Rs 25 crore, offering immediate revenue visibility and scalability for NRB Bearings. The target company has been recognised with HAL’s Best Performance Award for technical excellence and strong delivery capabilities, underscoring its credibility in manufacturing mission-critical aerospace components.

The acquisition allows NRB Bearings to fast-track its entry into the high-entry-barrier aerospace sector, significantly reducing the typical entry timeline of nearly three years. By leveraging Mahant Tool Room’s expertise, NRB strengthens its advanced manufacturing capabilities and diversifies its revenue base. This strategic move supports NRB’s long-term objective of achieving a turnover of more than Rs 2,500 crore within the next five years.

Financials

NRB Bearings Ltd, founded in 1965 and headquartered in Mumbai, is one of India’s leading manufacturers of high‑precision roller and needle bearings, supplying custom friction solutions for automotive and industrial applications globally, with a strong focus on innovation, quality, and engineering excellence.

In  Q2FY26 the company saw a YoY revenue growth of 7.6 percent, going from Rs 302 Cr in Q2FY25 to Rs 325 Cr in Q2FY26, while the QoQ went up by 5 percent from Rs 310 Cr in Q1FY26. The YoY Net Profits growth is at 14 percent, going from Rs 36 Cr in Q2FY25 to Rs 41 Cr in Q2FY26, while the QoQ growth stood at 24 percent from Rs 33 Cr in Q1FY26.

The company has a 3 year sales CAGR of 8 percent while the TTM number is at 10 percent. The 3 year profit CAGR is at 14 percent while the TTM is at 32 percent. The company has a ROCE of 16 percent and ROE of almost 13 percent.

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