Dear Sajal,

Thanks a lot for sharing knowledge and your efforts!

After listening to your video on Timken, I like to share my further study and understanding.

Definitely it is a solid business with global parentage, strong balance sheet and cash flows, and betting on India's growth runway.

Company's new plant in Bharuch helps in localizing SRB, CRB products which are otherwise imported/traded so far. This definitely helps a lot in the customer integration work, quick iterations/loops, inventory improvements, quick servicing, supply reliability, reduced freight costs..etc Overall a good step for the ecosystem, cost economics and moving away from competing purely on bearing volume. In the end, increasing the exit barriers and create lock-in.

But coming to valuation, you talked about market not recognizing the improvements in business quality, when it is already trading near 10x PB !!

Market is basically saying that this is not a typical commodity manufacturing company. May be some of, if not most, the growth expectations are largely priced in today !!

It traded above 15x PB when Gross Margins were close to 50 in the recent past. GMs may go back from current 40 to close 50s in coming quarters/years with the help of recent developments.

Timken is not fully comparable but closely valued like global industrial automation players ,like Siemens and ABB which have deeply integrated software + control systems. Closest and a mature and proven peer is SCHAEFFLER which has a much deeper workflow integration into adjacent systems with OEMs. Main edge for Timken comes from its exposure to diverse industries.

Please through some thoughts on below:

- What does your framework suggests on the acceptable valuation bandwidth for this business

- Beyond Bharuch utilization levels, margin improvements, what are the other key measurables to monitor going forward