Schaeffler India stays positive despite supply chain and cost challenges

Schaeffler India Ltd expects to sustain both domestic and export growth in 2026, despite ongoing supply chain disruptions and rising input costs linked to the West Asia conflict. Managing Director and CEO Harsha Kadam stated this during the company’s post-earnings analyst call. Kadam emphasized that while the company faces headwinds, it remains confident in meeting its financial targets for the year, provided supply chain and cost factors are closely monitored.

Key Highlights

• Schaeffler India expects to maintain growth in 2026 despite supply chain and input cost challenges
• Q1 CY26 revenue rose 18.8 percent year on year to Rs 2507 crore
• Export order book remains strong with growth forecast at 10 to 12 percent for the year
• EBITDA margin stable at 19.3 percent; profit after tax up 20.5 percent year on year
• Capex planned at Rs 400 to 500 crore for 2026 with Q1 spend at Rs 78.8 crore

Financial Performance and Growth

Schaeffler India reported revenue from operations of Rs 2,507 crore in Q1 CY26, marking an 18.8% increase from Rs 2,110 crore in Q1 CY25. However, revenue declined 5.1% sequentially from Rs 2,643 crore in Q4 CY25. The company maintained double-digit year-on-year growth in automotive technologies, vehicle lifetime solutions, and exports. Domestic business grew 16.4% year-on-year but declined 7.2% sequentially due to geopolitical conflicts.

Automotive Technologies grew 30.8% year-on-year, Vehicle Lifetime Solutions rose 18.1%, Bearings and Industrial Solutions increased 4.2%, and Intercompany Exports and others climbed 32.5%. Sequentially, Intercompany Exports and others grew 6.6%, while Automotive Technologies, Vehicle Lifetime Solutions, and Bearings and Industrial Solutions declined 1.3%, 0.6%, and 14.3%, respectively.

EBITDA for Q1 CY26 stood at Rs 483 crore, up 18.6% from Rs 407 crore a year earlier but down 4.5% from Rs 506 crore in the previous quarter. EBITDA margin was 19.3%, flat year-on-year and slightly higher than 19.1% in Q4 CY24. Profit after tax reached Rs 319.7 crore, up 20.5% year-on-year from Rs 265.4 crore, but down 2.5% from Rs 328 crore sequentially. PAT margin was 12.8%, compared with 12.6% in Q1 CY25 and 12.4% in Q4 CY25.

Export Demand and Cost Pressures

Director Finance and CFO Hardevi Vazirani reported a strong export order book across Europe, China, Southeast Asia, and the Americas. Export growth is expected to settle between 10% and 12% for the full year. In Q1, exports grew over 30% year-on-year, but Q4 growth was 6.6% due to a high base. Most exports are inter-company, with products sold to group entities for distribution to end customers.

Vazirani highlighted improved localization and stronger capabilities in India, especially in bearings, as key factors supporting export growth. She noted no current dip in export demand. The company continues to monitor input costs, particularly for fuel-linked items like LPG and propane, which have risen due to the West Asia conflict. Schaeffler is exploring alternate sourcing, stocking key materials, and seeking possible compensation from customers. Recovery of increased input costs typically takes six to eighteen months, with the first batch of price increases realized from Q2 onwards.

Capital Expenditure and Outlook

Schaeffler India plans to invest Rs 400-500 crore in capex during 2026. In Q1 CY26, capex stood at Rs 78.8 crore, compared to Rs 82.5 crore in Q1 CY25 and Rs 116.6 crore in Q4 CY25. Free cash flow was Rs 136.9 crore, down 42.2% year-on-year due to higher working capital needs. Management described the Q1 capex moderation as a timing issue, not a reduction in investment plans.

CarBike 360 Says

Schaeffler India’s consistent performance highlights its adaptability and strong market fundamentals. By leveraging technological advancements and strengthening its supply network, the company is poised to maintain momentum. Its forward-looking approach reinforces confidence among stakeholders as it continues to capitalize on opportunities in India’s expanding mobility ecosystem.