This article first appeared on GuruFocus .
Release Date: November 03, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Schaeffler India Ltd ( BOM:505790 ) received recognition from esteemed customers for best quality products and zero defect supplies.
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The company reported a 13.9% increase in revenue compared to the same period last year, reaching 2,360 crores.
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EBITDA margins improved, crossing the 20% barrier for the first time, indicating strong bottom-line performance.
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Localization efforts increased to 79%, aligning with the national agenda and improving cost efficiency.
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New business wins in automotive technology and industrial solutions sectors, including clutch applications and bearings, indicate growth potential.
Negative Points
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Passenger vehicle sales declined by 11.5% in the quarter, although production numbers remained stable.
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Export business saw a decline of 4.5% compared to the preceding quarter, impacting overall growth.
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The bearings and industrial solutions segment experienced lower growth, with some sectors showing sluggish performance.
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The company's e-commerce platform, KRSV Innovative Auto Solutions, reported a negative EBITDA margin of 14.7%, indicating ongoing challenges.
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Working capital increased to 19%, reflecting inventory buildup in anticipation of demand, which could impact cash flow.
Q & A Highlights
Q: Are OEMs asking Schaeffler India to increase production capacity due to anticipated demand post-GST reforms? A: Unidentified_4 (CEO): OEMs are optimistic about upcoming demand, partly due to GST reforms. While the reforms were announced in September, the full impact on vehicle sales wasn't immediate. However, we expect stronger traction in product demand, as indicated by our customers.
Q: With steady margins and recent plant commissions, is there potential for further margin improvement? A: Unidentified_4 (CEO): We aim to leverage our investments and increase machine utilization to generate value. Our focus remains on growing the domestic business, which constitutes 85% of our operations, while also exploring export opportunities.
Q: The bearings and industrial solutions segment showed a decline in Q3. Is this due to structural issues or specific sector weaknesses? A: Unidentified_4 (CEO): The decline is primarily due to timing differences in project-based businesses. Some sectors, like wind energy and railways, experience fluctuations based on project execution timelines, not structural weaknesses.
Q: What is the outlook for CapEx in the coming years, given the parent company's plans for significant investment in India? A: Unidentified_2 (CFO): While we focused on capital efficiency this year, we expect CapEx to increase in 2026, with a more significant pickup in 2027, aligning with the parent company's long-term investment strategy.
Q: Can you provide details on the localization levels for automotive and bearings portfolios? A: Unidentified_2 (CFO): Automotive localization is high, around 85-90%, due to proximity preferences of OEMs. In contrast, the industrial segment has about 40% imports, reflecting project-based variability and lower volumes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
