Schaeffler India Limited — Q4 FY26 earnings call

Call held 30 Apr 2026

Management summary

Schaeffler India reported strong Q1 CY26 results with double-digit YoY growth in revenue and PAT, driven by robust performance in Automotive Technologies and exports. Despite QoQ declines and supply chain challenges, the company maintained healthy margins and achieved 80% localization. Management highlighted intensifying competition and a liquidity crunch in the industrial aftermarket.

Highlights

  • Revenue of INR 2,507 crores, up 18.8% YoY.

  • EBITDA margin at 19.3%, with EBITDA of INR 483 crores.

  • Profit After Tax (PAT) of INR 319.7 crores, up 12.8% YoY.

  • Automotive Technologies segment showed strong growth of 30.8% YoY.

  • Exports posted robust growth of 32.5% YoY.

  • Localization levels reached 80%.

Concerns

  • Revenue dropped 5.1% QoQ compared to Q4 2025.

  • EBITDA saw a 4.5% drop QoQ.

  • Bearings and Industrial Solutions segment experienced a significant 14.3% drop QoQ.

  • Liquidity crunch in the aftermarket industrial business led to demand slowdown.

  • Supply chain headwinds due to Middle East crisis impacted fuel costs.

Key financials

  1. Revenue ₹2,507 Cr +18.8%YoY
  2. EBITDA ₹483 Cr +18.6%YoY
  3. EBITDA Margin 19.3%
  4. PAT ₹319.7 Cr +12.8%YoY
  5. PAT Margin 12.8%
  6. EBIT Margin 15.8%
  7. Free Cash Flow ₹137 Cr

What they filed

Q1 FY27: revenue up 17.5%, net profit up 13.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,073 2,082 2,110 2,282 2,360 +14%2,643 +27%2,507 +19%2,681 +17%
EBITDA375 378 401 431 467 +25%489 +29%468 +17%502 +16%
Net profit247 249 265 296 307 +24%328 +32%320 +21%337 +14%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentShare of SalesYoY GrowthQoQ Drop
Automotive Technologies37%30.8%-1.3%
Bearings and Industrial Solutions35%4.2%-14.3%
Vehicle Lifetime Solutions12%18.1%-0.6%
IC Exports16%32.5%—

Capital allocation

high confidence
  • Capex ₹80 Cr this quarter · ₹500 Cr (CY26) planned Raised — picking up from rationalized spend last year

    Previously planned ₹400 Cr

    Talking about capex. As I said, we had marginally reduced the investments, but nevertheless, close to INR 80 crores still continued to be the investment within the quarter. And as a percentage to sales, we are at about INR 350 crores and 3.1%. (Page 7) ... So, it will be in the range of what we had earlier, INR 400 crores to INR 500 crores investment this year. This is the trend which was there a year before last year. Last year, we had rationalized a little bit. But this year, again, we will be picking up and going in that range of INR 500 crores. (Page 18)
  • Liquidity Liquidity disclosed Positive free cash flow into the system of INR 137 crores in Q1 CY26, compared to INR 237 crores in Q1 last year.
    Talking about free cash flow. We had a positive cash flow into the system of about INR 137 crores coming in, in the first quarter compared to the Q1 of last year where it was about INR 237 crores that came in. (Page 7)

Guidance & targets

Capex

  • Total Investment Capex · CY26 · High confidence INR 400-500 crores

    Previously INR 400 crores → INR 400-500 crores

    So, it will be in the range of what we had earlier, INR 400 crores to INR 500 crores investment this year. This is the trend which was there a year before last year. Last year, we had rationalized a little bit. But this year, again, we will be picking up and going in that range of INR 500 crores.

    — Hardevi Vazirani

Volume

  • Export Growth Volume · full year · Medium confidence 10-12%
    And very likely, if we go run rate of the full year, we will be close to 10% to 12%.

    — Hardevi Vazirani

What to watch in Q1 FY27

Impact of Cost Increases & Customer Compensation

next quarter
Current Early days (1.5 months) since inflationary increases, exploring alternate sourcing, stocking, and customer compensation.
Target Successful adjustment of cost increases or accommodation/compensation from customers.

Why it matters

The ability to mitigate rising commodity costs and secure customer compensation will directly impact future margins.

I guess time will tell us how successful we will get in terms of adjusting these cost increases or accommodating these cost increases or getting compensation for these cost increases. (Page 9)

Risks & concerns

  • Supply Chain Disruptions

    medium

    Geopolitical conflicts in the Middle East and West Asia led to choking of supply chains for fuel items like LPG and propane, increasing input costs.

    Management acknowledged

  • Liquidity Crunch in Aftermarket Industrial Business

    medium

    A liquidity crunch in the market impacted cash flows to distributors, leading to a slowdown in demand offtake in specific industrial sectors.

    Management acknowledged

  • Increased Competitive Intensity

    medium

    Competition is intensifying in India, particularly in the bearings segment, necessitating portfolio recalibration to maintain profitability and growth.

    Management acknowledged

  • Commodity Price Volatility

    medium

    Increased prices for fuel items (LPG, propane) due to supply chain issues, with the company exploring mitigation strategies like alternate sourcing and customer compensation.

    Management acknowledged

Q&A highlights

7 direct
Industrial Segment Outlook Direct
As we see, we do not see major concerns in terms of delivering the numbers that we are committed to deliver this year. Of course, it would require a lot of monitoring as well as agility on our part.

Analyst sought clarity on the industrial segment's future performance, especially for key sub-sectors like wind and railways, given current economic conditions.

Asked by Raghunandhan

Automotive Outperformance Drivers Direct
I think almost all the product portfolios have done very strong in the first quarter for us, clearly pointing to a good traction in the automotive space. So, hybrid too has definitely done well.

Analyst questioned the source of automotive segment's significant outperformance (31% growth) compared to underlying industry growth, seeking drivers like increased wallet share or specific product lines.

Asked by Raghunandhan

Export Outlook and Geopolitical Issues Partial
So yes, if we see year-on-year quarter, we see over 30% growth. But if we see over Q4 because we ramped up significantly last year from Q1 to Q4, the growth is at 6.6%. And very likely, if we go run rate of the full year, we will be close to 10% to 12%.

Analyst sought clarification on the sustainability of strong export growth (30%) given prior moderate expectations and ongoing geopolitical issues.

Asked by Raghunandhan

Commodity Cost Pass-Through Direct
So, Raghu, as you are aware, with the situation in the West Asia clearly has resulted in choking of the supply chains for the fuel. So, LPG, propane and some of the fuel items, which India relies heavily on imports has been impacted and the prices definitely have gone up there.

Analyst inquired about the company's ability to pass on increased commodity costs, particularly fuel, and the mechanisms in place for this.

Asked by Raghunandhan

Bearings Business Slowdown and Competition Direct
Well, that is one of the reasons as well that we see our competition is also intensifying their activity within India. And hence, it is important that we recalibrate our portfolios as well, where do we want to focus and how do we continue to sustain the growth as well as the profitability development for our organization.

Analyst questioned the flat/declining trend in the bearings business, asking if it was due to weak end markets, increased competitive intensity, or the company's 'calibration exercises'.

Asked by Mukesh Saraf

E-axle Competition and Future Product Supplies Direct
Well, my answer to that would be that, yes, the competition is what it is out there. What is more important is do we navigate through and still keep our strategic goal and focus and continue to trudge along.

Analyst raised concerns about potential competition from Tata Auto Components' JV with Bosch for e-axles, questioning its impact on Schaeffler's future product supplies to existing customers like Tata Harrier.

Asked by Mukesh Saraf

Bearing Localization Percentage and Scope Direct
Almost 80% localization is our total revenue we are talking and not just industrial. Within industrial space, we might be around 60% or so. And there is still enough room for us in the industrial space, specifically bearings to localize.

Analyst sought clarification on the 80% localization figure, asking for a breakdown by specific bearing types and the ultimate potential for localization.

Asked by Varun Jain

Industrial Segment Performance and Liquidity Crunch Direct
And generally, we see in the first quarter of the year, there's always a slow start, and then it builds up, correct? But this year, we have seen a little lower traction than what we used to see before. And the primary reason for that is the liquidity crunch in the market.

Analyst questioned the industrial segment's underperformance, especially given Schaeffler's leadership and localization advantage, linking it to market liquidity conditions.

Asked by Viraj Kacharia

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Detailed narrative

Q1 CY26 Performance Overview

Schaeffler India reported robust Q1 CY26 results with revenue of INR 2,507 crores, marking an 18.8% YoY growth, despite a 5.1% QoQ decline. EBITDA stood at INR 483 crores (19.3% margin), growing 18.6% YoY but dropping 4.5% QoQ. Profit After Tax (PAT) was INR 319.7 crores (12.8% margin), up 12.8% YoY, reflecting a marginal QoQ drop. The company also generated INR 137 crores in free cash flow during the quarter.

Awards and Accolades

In Q1 2026, Schaeffler India received six prestigious awards from its customers. These included the John Deere Partner Level Excellence Award for strong engagement in transmissions, TVS Mobility for strategic partnership in Vehicle Lifetime Solutions, and Rail Analysis for innovation in underframe components for Indian Railways and Metros. Other recognitions came from Adani Power for innovative products in thermal power plants and ELIN for outstanding contributions to the wind sector.

Economic and Industry Outlook

The overall economic outlook for India in Q1 CY26 was characterized by resilient domestic growth, despite geopolitical conflicts and trade pressures. Core industrial sectors, including cement, steel, electricity, fertilizers, and coal, showed positive growth in January 2026. The automotive sector demonstrated robust traction, with 2.5 million two-wheelers and over 0.5 million passenger vehicles produced in March alone, indicating a strong growth story for India's auto industry.

Business Segment Performance

Automotive Technologies, encompassing ICE and e-mobility, showed strong performance with 30.8% YoY growth, contributing 37% to total sales. Vehicle Lifetime Solutions also posted robust double-digit growth of 18.1% YoY, accounting for 12% of sales. Bearings and Industrial Solutions, representing 35% of sales, grew 4.2% YoY but experienced a significant 14.3% QoQ drop due to recalibration efforts and market liquidity. Exports were a strong performer, growing 32.5% YoY and 6.6% QoQ, making up 16% of total sales.

Localization and Supply Chain Management

Schaeffler India has achieved 80% localization, driven by efforts to be closer to customers and optimize its product and market mix. The company is actively developing local suppliers for e-axle components as part of Phase 2 localization, aiming to source more child parts from within India. Despite supply chain headwinds from the Middle East crisis impacting fuel costs, the company implemented crisis management meetings, explored alternate sourcing, and stocked up on items to maintain supply chain integrity.

Capital Expenditure Plans

The company invested INR 80 crores in Q1 CY26, representing 3.1% of sales. For the full calendar year 2026, Schaeffler India plans capital expenditure in the range of INR 400-500 crores. This indicates a strategic ramp-up in investments compared to the previous year's rationalized spend, with a focus on continuing investment initiatives as customer projects evolve and market demand dictates.

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