Schaeffler India Limited

Schaeffler India Limited reported a strong Q2 CY25, with revenue reaching ₹2,282 crores, an 8.2% increase QoQ and 10.1% YoY. EBITDA stood at ₹449 crores, translating to a 19.7% margin, up 10.3% QoQ and 16.6% YoY. Profit After Tax (PAT) was ₹296 crores, with a 13% margin, growing 11.6% QoQ and 17% YoY. For the first half of CY25, revenue was ₹4,392 crores, a 12% YoY growth, with an EBITDA margin of 19.5% and PAT margin of 12.8%. The company also generated a robust free cash flow of ₹287 crores in the quarter.

The company received four customer awards, including two from the Toyota Group for 'Zero Defect Supplies' and '100% Delivery', one from Honda Limited for its 'Vehicle Lifetime Solutions' business, and one from Alstom for its Railway sector contributions. Additionally, Schaeffler India was recognized with three agency awards for its Corporate Social Responsibility (CSR) initiatives, notably for the 'Jal Samruddhi' water conservation project and 'Diversity and Inclusion' efforts focused on women empowerment in Tamil Nadu.

Schaeffler India inaugurated its fifth manufacturing facility in Bangalore in May, dedicated to clutch and drivetrain applications, spanning 16,500 square meters with potential for 3x expansion. The company also commenced series supplies of e-axles for the Tata Harrier platform, inaugurating a partial production line in Talegaon and planning a Phase 2 expansion for further localization. The e-axle project has a projected lifetime order value of €300 million, with a clear focus on the Indian e-mobility market.

The Q2 CY25 GDP is estimated at 6.5%, a slight drop from the preceding quarter. Automotive production remained stagnant, with domestic passenger car sales lower but exports showing double-digit growth. Commercial vehicles were subdued, but agricultural tractors experienced strong month-over-month and year-over-year increases. Industrial production saw a slowdown, though cement and steel sectors performed well. The consumer price index dropped to 2.7%, the lowest since 2019, which is expected to positively impact consumption.

The company's localization rate improved to 78-79% in Q2 CY25, up from 75-76% in the previous quarter, driven by strong export demand and a strategic focus on domestic production. This has enabled better utilization of existing capacities. Overall capacity utilization is currently close to 85%, with all plants operating above 80%. In the last year, over 27 different types of bearings, including some for the wind segment, have been localized.

KRSV Innovations Auto Solutions Limited (Koovers) generated ₹71 crores in revenue during Q2 CY25, aligning with the company's plans. However, the business continues to face challenges with negative margins, reporting an EBITDA of -15% and an EBIT of -16.8%. Addressing these margin challenges is a key focus area for management to improve the consolidated financial performance.