Schaeffler India Ltd reported a 17.5% year-on-year increase in revenue to ₹2,681.4 crore for the second quarter of calendar year 2026, supported by robust growth in its Automotive Technologies business. Profit after tax rose 13.7% to ₹336.7 crore, even as higher input costs placed modest pressure on margins.
Revenue was also 7% higher compared with ₹2,507 crore in the preceding quarter. Net profit increased 5.3% sequentially from ₹319.7 crore in Q1 CY2026.
Earnings before interest, tax, depreciation and amortisation, or EBITDA, increased 16.4% year-on-year to ₹501.7 crore from ₹430.9 crore. On a sequential basis, EBITDA rose 7.1%.
The EBITDA margin stood at 18.7%, compared with 18.9% in the corresponding quarter of the previous year. The 17-basis-point decline was relatively contained despite a sharp rise in the cost of goods sold, suggesting that cost controls helped prevent inflation from taking a larger bite.
The company’s profit-after-tax margin declined to 12.6% from 13% a year earlier and 12.8% in the previous quarter. Other income fell 12.7% year-on-year to ₹39.3 crore, while earnings per share increased to ₹21.5 from ₹19.
Automotive Technologies leads growth
The Automotive Technologies division emerged as the principal growth engine, with revenue rising 33.3% year-on-year to ₹940.3 crore. The business accounted for about 35% of Schaeffler India’s quarterly sales.
The division’s performance was supported by new business wins for passenger-vehicle clutches and overrunning alternator pulleys. Demand for double-clutch products from the tractor industry also remained strong, according to the research report.
Bearings and Industrial Solutions, the company’s largest segment during the quarter, recorded revenue of ₹942.9 crore, an increase of 5% from the previous year.
Vehicle Lifetime Solutions revenue grew 9.9% to ₹333.5 crore, while the Intercompany Exports and Others segment expanded 23.8% to ₹464.8 crore. The figures indicate that growth was spread across the business, although the automotive division clearly did most of the heavy lifting — or, appropriately for a motion-technology company, most of the moving.
Commodity costs weigh on margins
Cost of goods sold increased 34.4% year-on-year to ₹1,277.6 crore, significantly faster than revenue growth. Gross profit nevertheless rose 16% to ₹1,067.3 crore, although the gross margin narrowed by 52 basis points to 39.8%.
The company experienced some pressure from commodity inflation during the quarter. Its indexation arrangements with original equipment manufacturers could help ease the impact during the second half of the year, the report said.
Employee benefit expenses rose by a comparatively moderate 5.4% to ₹151.6 crore, while other expenses increased 19.8% to ₹414 crore.
Exports targeted at 20% of revenue
Exports contributed approximately 17% of revenue during Q2 CY2026. Schaeffler India expects their share to move towards 20% in the near term, despite continuing localisation initiatives across several businesses.
The export opportunity is supported by the company’s position within the wider global Schaeffler network, while localisation is expected to increase domestic manufacturing content and reduce reliance on imported components.
Schaeffler India has also secured Bureau of Indian Standards licences for its key manufacturing facilities at Savli and Maneja, strengthening compliance and localisation capabilities.
Investment rises as cash flow declines
Capital expenditure stood at ₹95.8 crore during the quarter, equivalent to approximately 3.6% of sales. The company has guided for capital expenditure of ₹500 crore for the full year, with orders for machinery and equipment already placed.
Free cash flow declined 66% year-on-year to ₹96.5 crore. The fall was attributed mainly to higher working capital requirements, including a planned inventory build-up, as well as increased costs. Working capital rose to 19.7% of sales.
KRSV, which operates the Koovers aftermarket platform, generated quarterly revenue of ₹79.1 crore. The business is expected to reach break-even in 2029.
Brokerage retains ‘Buy’ rating
Mirae Asset Sharekhan maintained its “Buy” rating on Schaeffler India with a price target of ₹5,032. The target represents a potential upside of approximately 22% from the ₹4,093 market price cited in the report.
The brokerage highlighted localisation, exports, e-mobility products, aftermarket expansion and infrastructure-related industrial demand as medium-term growth drivers. It also identified higher-than-expected raw-material inflation as a key risk to profitability.
Schaeffler India’s quarterly performance reflects firm demand across automotive, industrial and export markets, while maintaining an EBITDA margin close to 19%. Its next challenge will be to convert that growth into stronger cash generation while keeping commodity costs under control — because even a company specialising in smoother movement must occasionally negotiate a few bumps in the road.
