Schaeffler India Q1 FY27 earnings call
In brief
Schaeffler India eyes ₹10,000 cr FY revenue run-rate, flags 80% localization; auto outpacing industrial on GST 2.0 demand.
- Management's tone
- Confident
- What was said
- Leaned positive
- Guidance
- None given
- Analyst pushback
- Low
- Stock, next session
- −1.30% (Nifty 50 −1.56%)
- Auto outpacing industrial; auto demand boosted by GST 2.0 and BS-VI new product cycles, while industrial mixed with steel, cement strong but mining weak.
- Localization at 80% overall (auto 90%, industrial 65-70%), up from 60-65% 3-4 years ago; no specific target set by management.
- Company will cross ₹10,000 crores based on YTD June run-rate; e-axle currently 100% import in Phase 2, 85,000 unit demand vs 300,000 capacity.
- Export share to remain 15-20% of revenue as domestic base grows 14-15%; current spread 50% Europe, 25% SE Asia, 13% China.
- Vitesco legal integration 'work in progress' with no timeline; railways at 13-14% of revenue with double-digit growth; new 1.6m wind bearing for 6 MW produced.
An AI read of the company's transcript · the filing
The numbers
The quarter, Q1 FY27
| This quarter | A year ago | Last quarter | Margin | |
|---|---|---|---|---|
| Revenue | ₹2,761 cr | −39.0% | +6.8% | |
| EBITDA (excl. other income) | ₹499 cr | −39.4% | +4.3% | 18.1% (18.2% a year ago) |
| Net profit | ₹0 cr | — | — | 0% (0% a year ago) |
| EPS (₹) | ₹20.80 | −39.7% | +3.0% |
From the company's filed results for the quarter ended 30 Jun 2026 (consolidated), not from the call. EBITDA here excludes other income, so it can differ from the figure management quotes.
What moved the numbers, as management explained it
- GST 2.0 helped auto demand uplift post-September cut; BS-VI compliance driving new clutch and engine system requirements, especially in passenger vehicles.
- Localization rose from 60-65% to 80% over 3-4 years; auto at 90%, industrial at 65-70%, reducing exposure to imported input cost shocks.
- Steel has indexed price formula in OEM contracts; fuel and FX cost pass-through only ~70% historically recovered, with 30% absorbed via efficiency and localization.
- E-axle still 100% imported in Phase 2; low margin vs ICE, vulnerable to FX and dependent on volume scaling to reach true localization in Phase 3.
- Government infrastructure push aiding steel, cement, construction equipment; mining and railway tendering still lumpy; industrial growth single-digit vs auto double-digit.
The numbers management led with
- Overall localization rate: 80% (automotive 90%, industrial 65-70%)
- E-axle import content: 100% import; Phase 2 localization underway (assembly); Phase 1 line capacity 300,000 pieces vs 85,000 demand
- YTD June FY27 revenue run-rate: Will cross INR 10,000 crores
- Wind bearing capability: 1.6m bearing produced last quarter for 6MW turbines; ~50% market share in wind bearings
Guidance
Guidance on this call
| What | For | What management said |
|---|---|---|
| Export share | CY26 | export will continue to be between 15% and 20% |
| Railway growth | H2 FY27 | double-digit growth, at least, 6 months |
| Consolidated revenue | FY27 | based on YTD June performance, we will cross INR10,000 crores |
What changed since the Thu 23 Jul 2026 call
| What | On the Thu 23 Jul 2026 call | On this call |
|---|---|---|
| Industrial segment growth tone (restated) | Industrial segment soft at 5% YoY; aspiration to return to double-digit growth (CY26) | Industrial described as 'good, growing' but slower than auto; steel, cement strong; construction equipment and mining weak |
| Localization level disclosure (new) | — | Localization at 80% overall (auto 90%, industrial 65-70%), up from 60-65% 3-4 years ago; no specific target set |
| Wind energy capability expansion (new) | — | 1.6 meter bearing produced for 6 MW; Hall 3 construction starting at Savli; market share ~50% with 85% of customer production exported |
| Export share band guidance (held) | Cautiously targeting 15-20% growth for CY26; cap of 20% on exports share remains | Export share to remain 15-20% of revenue; geography 50% Europe, 25% SE Asia, 13% China |
| Full-year revenue projection (new) | — | Based on YTD June performance, will cross ₹10,000 crores (FY27) |
| KRSV Koovers EBITDA breakeven (not repeated) | KRSV Koovers EBITDA breakeven not expected until 2029; wage hike of ~10% absorbed, not passed through | Not mentioned |
Guided on earlier calls, and what was filed
| What | For | Guided | Filed |
|---|---|---|---|
| Double-digit revenue growth commitment | FY26 | at least 10% (on the Q2 FY26 call) | 43.8%, within the range |
Filed figures are summed from the company's own quarterly results for the whole period (EBITDA excludes other income); where one sits against what was guided is arithmetic, not a judgement.
The business
By business
Automotive Technologies
Auto space grew 29-30% with strong IC engine demand aided by GST 2.0 and BS-VI product cycles; e-mobility base very small but 300% growth on e-axle; localization at 90% (broader auto 95%+).
Auto growth 29-30% · E-mobility growth 300% · Localization 90% · Localization 95%+ (broader auto)
Outlook: E-axle Phase 2 localization ongoing; new Hall 2 at Shoolagiri and new ICE transmission production lines coming to India.
Bearings & Industrial Solutions
Industrial described as 'good, growing' but slower than auto; steel and cement strong on infrastructure push; construction equipment and mining weak; localization at 65-70% with 18-20% bearings still imported.
Localization 65-70% · Bearings import 18-20%
Outlook: Localization push continues; large size cylindricals an opportunity; new investments in wind, railway and steel-sector localization.
Railway
13-14% of revenue with double-digit growth; benefits from 100% electrification and Vande Bharat upgrade; new product portfolio including Class K for freight and axle boxes.
Revenue share 13-14%
Outlook: Double-digit growth for at least 6 months; new production line capacities on the way; focus on traction motors, axle boxes, gearboxes.
Wind Energy
1.6 meter bearing for 6 MW turbines produced last quarter; Hall 3 construction starting at Savli for next phase; Schaeffler holds nearly half market share; 85% of customer production exported.
Bearing 1.6m for 6 MW · Customer production 85% exported · Schaeffler market share ~50%
Outlook: Hall 3 expansion focused purely on wind; investing in larger bearing sizes as wind graduates to mid and higher capacities.
Balance sheet, capex and funding
- Shoolagiri (Hosur) greenfield: starting assembly of new products, second hall building underway, one production line on the way from Europe for PV transmission.
- Savli: Hall 3 construction starting, focused purely on wind segment expansion within existing footprint.
- E-axle Phase 2 production line installation underway for sub-component assembly; 300,000 unit annual capacity vs 85,000 demand.
- Ongoing investments in steel sector localization, wind capacity expansion, and e-mobility localization, supported by new product line capex.
The industry, as management sees it
Management sees a fragmented powertrain market in India through the decade - EV adoption stuck below 5% today and only 15% by 2030-31 due to absent policy clarity, with hybrids rising to an equal 15%. Industrial growth remains single-digit in India, gating localization economics, while Automotive Technologies is the standout growth engine riding GST 2.0 and BS-VI product transitions.
Risks management named
- West Asia crisis and fuel/LPG cost inflation; pass-through partially work-in-progress with customers
- FX depreciation on imported sub-components not covered by indexed escalators
- Fragmented powertrain market (ICE/hybrid/EV) in India - 15% EV by 2030-31, hybrids at 15% by 2031
- E-axle currently 100% import with low margins vs ICE until localization and volumes scale
- Industrial sector single-digit growth limiting localization ROI for low-volume product lines
Q&A
Q&A was structured as an open forum with a single anonymous questioner driving a wide-ranging discussion across 30 exchanges. Topics moved fluidly from exports and localization to e-axle economics, Railways growth, Vitesco integration, EV competition, and the humanoid thesis. Management gave specific numbers throughout (80% localization, 13% of exports to China, INR 10,000 crores YTD June, Railways 13-14% of revenue, 70% commodity pass-through) and only deflected once - on the Shoolagiri Phase 2 capex figure. Harsha Kadam was the dominant voice, fluent and confident, with Hardevi Vazirani injecting precise financial data. Pushback was minimal; the format was informational rather than adversarial.
Not answered directly
- Shoolagiri Phase 2 capex quantum
Asked for a number, answered without one
- Shoolagiri Phase 2 capex: I don't have the numbers right now, but certainly it is focused on the passenger vehicle transmission side.
- Vitesco legal integration timeline: No timeline as of now. Group has to integrate Vitesco into Schaeffler entities worldwide; few dozen companies, easier via private companies than listed entity merger.
- Localization target: We don't set a target for localization. Localization number is more an outcome of where we have reached.
Every question, with its answer
1. Exports outlook and geographic mix
Questioner, Unknown
Question. Exports have grown sharply. With geopolitical tensions rising, what is the outlook? How should we think about the INR 350-400 crores run-rate and geographic mix going forward?
Answer, Hardevi Vazirani, Director - Finance and CFO. Export mix is 50% Europe intercompany, 25% Southeast Asia, balance China and Americas - deliberately diversified. No explicit exports strategy; export is residual capacity from local capacity build-out. Domestic market growing 14-15% widens the denominator, so exports will remain 15-20% of business even as the base scales. Leverage 21 shifts and efficiency when demand is strong.
2. Make in India as export platform
Questioner, Unknown
Question. Other companies talk about Make in India as an export platform - top-down, does Schaeffler want to scale exports on this momentum?
Answer, Hardevi Vazirani, Director - Finance and CFO. Distinguishes 'export' for Ford/Stellantis (who make engines in India and ship back) from Schaeffler's domestic business. For Schaeffler, production line is set up where the highest demand for a specific product exists. Group no longer has an EOU-style export-only strategy from India.
3. Localization target
Questioner, Unknown
Question. Localization is at 80%. Is there a target to take it higher over the next 4-5 years?
Answer, Harsha Kadam, Managing Director and CEO. No specific target. Localization is an outcome of customer-strategy-driven investment, not a number to chase. Steel, wind product applications and e-axles (now in Phase 2 localization) are the active areas. We could hit 80% by localizing the wrong things - that wouldn't be strategic.
4. Capacity allocation criteria
Questioner, Unknown
Question. When devoting capacity, is the key criteria strong domestic demand for that product?
Answer, Harsha Kadam, Managing Director and CEO. Yes. Pure export strategy in today's geopolitical environment is too risky. If a war breaks out and demand drops, a dedicated export line would sit idle with no domestic offtake. India must also need the product to derisk the investment.
5. Automotive Technologies growth and EV mix
Questioner, Unknown
Question. On the AT (Automotive Technologies) side, what's the growth factor? How much is EV-related within the 29-30% growth in AT?
Answer, Harsha Kadam, Managing Director and CEO. Bulk of 29-30% growth in Automotive is still IC engine, helped by GST 2.0 demand pull and BS-VI product transitions (clutch and engine systems). E-mobility is seeing 300% jumps but off a small base, driven by e-axle demand at customers like Tata Harrier.
6. Order visibility and book-to-bill
Questioner, Unknown
Question. How far ahead do you have visibility of orders? What is the book-to-bill and order tracking methodology?
Answer, Harsha Kadam, Managing Director and CEO. Two horizons: continuous engagement on running production, and 1-3 year mid-term for new launches (Tier 1s typically develop 2-3 years ahead). Tracks probability success at 25/50/75% gates. Book-to-bill ratio above 1 is the key forward indicator; below 1 flags growth risk 2 years out.
7. West Asia impact on book-to-bill
Questioner, Unknown
Question. Has the West Asia conflict and tariff/oil noise impacted the 6-12 month book-to-bill outlook?
Answer, Harsha Kadam, Managing Director and CEO. West Asia impacts industrial-side exports (predominantly bearings), not automotive demand. From a cost side, fuel and LPG input costs have risen and pass-through is work-in-progress. Demand outlook intact; first-time car buyers overtook repeat buyers last month - a strong signal of GST 2.0 traction.
8. Commodity pass-through
Questioner, Unknown
Question. On commodity pass-through - how much of cost increases can you recover from customers, and over what lag?
Answer, Harsha Kadam, Managing Director and CEO. Steel works on a contractual indexation formula, so fully compensated. Other input costs are negotiable; with INR depreciation, imported child-parts inflation is hard to pass through. Hardevi added: historically ~70% is recovered, balance via operational efficiency and localization. Suppliers themselves have raised prices, so the entire value chain must align.
9. Shoolagiri capacity expansion
Questioner, Unknown
Question. Shoolagiri seems to have much bigger potential than the rolled-out Phase 1 capex - is that the case?
Answer, Harsha Kadam, Managing Director and CEO. Yes - it's a greenfield. Started with one hall feeding the existing plant; now moving to assembly of new product. A production line is on the way from Europe to be set up in the current facility, and a second hall building is going ahead. Focused on passenger vehicle transmission.
10. Shoolagiri Phase 2 capex
Questioner, Unknown
Question. Any color on the Phase 2 capex number?
Answer, Harsha Kadam, Managing Director and CEO. I don't have the numbers right now, but it is focused on the passenger vehicle transmission side.
Not answered directly.
11. Probability of winning auto orders
Questioner, Unknown
Question. On auto visibility - what factors increase the probability of winning orders versus peers? Technology differentiation, pricing, or features?
Answer, Harsha Kadam, Managing Director and CEO. Technology differentiation is critical. Cites the e-axle: coaxial design (gearbox and motor mated on same shaft) is more compact than competitors' off-axis solutions. With electronics and software coming in, more features drive more value. Indian Tier 1s want the best technology at the lowest cost.
12. Industrial segment growth outlook
Questioner, Unknown
Question. On the industrial side - has growth improved or stayed the same?
Answer, Harsha Kadam, Managing Director and CEO. Mixed. Steel, cement, infrastructure-related industries strong. Construction equipment was negative last year but bullish at bauma. Mining hasn't picked up due to lease policies. Renewables (wind) growing strongly. Railways booming with quality, reliability and safety upgrades enabling new product play. Solar not pursued - product not right for India. Industrial is growing but automotive is growing faster on GST 2.0.
13. Vitesco integration into India entity
Questioner, Unknown
Question. On the Vitesco merger for the Indian entity - where are we and what is the hurdle for the two entities coming together?
Answer, Harsha Kadam, Managing Director and CEO. From a customer standpoint, Vitesco and Schaeffler are not seen as separate - the entire decision-making and leadership sits in the listed entity, and the Vitesco portfolio is already flowing through to the same customers. Structurally not integrated; acknowledge that. Hardevi added: no fundamental hurdle, but globally the group has a few dozen companies to integrate, and private-to-listed integration is harder. Schaeffler holds 74.13%, public 26%. No timeline as of now.
14. Vitesco integration timeline
Questioner, Unknown
Question. But no timeline at all on Vitesco integration?
Answer, Hardevi Vazirani, Director - Finance and CFO. No timeline as of now.
15. Railways demand drivers
Questioner, Unknown
Question. Within Railways - where is demand coming from? New product lines like wagons/passengers, or replacement?
Answer, Harsha Kadam, Managing Director and CEO. 100% electrification of Indian Railways favors us - electric locomotives use insulation-coated bearings, and we are one of the few making 100% locally. Vande Bharat and freight upgrades (triple-decker containers) are lifting load on bearings, opening axle boxes, traction motors, gearboxes, Class K product for freight. Hardevi: Railways is ~13-14% of revenue, double-digit growth for at least the next 6 months.
16. Railways secular vs lumpy growth
Questioner, Unknown
Question. Is Railways a secular growth or will lumpiness from tendering always remain?
Answer, Harsha Kadam, Managing Director and CEO. Lumpiness from the tendering format will remain. Positive change: Railways is now partially privatized (private coach building), which changes the tendering dynamic. That structural shift is here to stay.
17. Wind exports and 1.6m bearing
Questioner, Unknown
Question. On the wind part - have we made inroads on additional exports?
Answer, Harsha Kadam, Managing Director and CEO. Schaeffler does not directly export wind bearings from India. But 85% of wind turbine manufacturers' production is exported, and Schaeffler holds ~half the market share in wind bearings. So bearings effectively go wherever the turbines are sold. Hardevi added: 1.6m bearing was produced last quarter for 6MW turbines; Savli Hall 3 is being built for further wind expansion.
18. Indirect US wind exposure
Questioner, Unknown
Question. How much indirect exposure would there be to US-based wind companies?
Answer, Harsha Kadam, Managing Director and CEO. US exposure is very small - only GE. Exposure is predominantly to European brands: Siemens Gamesa, Vestas, Nordex (Netherlands, Germany, Belgium-based), all of which manufacture in India.
19. Vitesco parts sourcing
Questioner, Unknown
Question. On Vitesco - what parts do we buy from Vitesco India or Vitesco global? For example, the 3-in-1 e-axle - some parts from Vitesco?
Answer, Harsha Kadam, Managing Director and CEO. The e-axle is entirely Schaeffler portfolio including power electronics - the business win predated the Vitesco acquisition. Going forward, new wins will leverage Vitesco portfolio - e.g., battery management systems, design/development from Vitesco, but Schaeffler India is the face to the customer. Currently Vitesco still supplies sensors and some control units to passenger vehicles as before.
20. Business routed through Schaeffler India
Questioner, Unknown
Question. Entire India business would be done through Schaeffler?
Answer, Harsha Kadam, Managing Director and CEO. Most of it. Some legacy Vitesco supply (sensors, control units) continues unchanged. The larger system-level plays (e-axle etc.) and new business acquisition sits with Schaeffler. Customers not willing to switch yet, but the trajectory is toward Schaeffler fronting all new wins, using Vitesco tech like BMS and thermal management control units.
21. Vitesco Global vs India portfolio
Questioner, Unknown
Question. What is the difference in portfolio between Vitesco Global and Vitesco India? Similar or different?
Answer, Harsha Kadam, Managing Director and CEO. Vitesco is mostly electronics with software plus power electronics (a large part of any EV). India doesn't yet have power electronics because EV volumes are too small, but design and development capability exists. The Schaeffler/Vitesco combination is now talking 800V (up from 400V), opening commercial vehicle opportunities including electrified public transport buses.
22. Batteries and motors in Vitesco scope
Questioner, Unknown
Question. Batteries and motors - those are not part of Vitesco?
Answer, Harsha Kadam, Managing Director and CEO. Vitesco does not make batteries or motors. They make power electronics, control units, and a lot of sensors (NOx, knock sensors mainly for gasoline/two-wheelers). Knock sensors are non-EV; NOx sensors driven by tightening regulations.
23. EV competition and profitability
Questioner, Unknown
Question. Competition is intensifying in EV - Bosch announced a JV with Tata Auto Components. EV parts aren't yet as profitable as ICE. How do you see this evolving and how do you pursue the opportunity?
Answer, Harsha Kadam, Managing Director and CEO. Profitability on emerging tech is volume-dependent - put in crores, produce two parts, lose money. EV adoption in India is <5% today and projected only 15% by 2030-31. Hybrid technology is also rising, projected at 15% of the market by 2031, fragmenting demand. Who has the financial stamina to weather a fragmented market is the key determinant. Schaeffler is betting on ICE, hybrid and EV simultaneously - not many can do that. Channelizing more investment toward whichever segment wins.
24. E-axle margin and import content
Questioner, Unknown
Question. Initial import kits could be a little higher - will that yield margin pressure on the e-axle? What's the import content currently?
Answer, Hardevi Vazirani, Director - Finance and CFO. 100% import for the e-axle currently. It is low margin compared to ICE - have to take that risk until volumes and localization scale, otherwise out of the market. Phase 2 localization (sub-component assembly) underway; Phase 3 (local child parts) is supplier development, handholding smaller suppliers. Phase 1 line can test 300,000 pieces but demand is only 85,000 pieces - economy of scale gap is real.
25. Phase 3 e-axle localization trigger
Questioner, Unknown
Question. At what point do you decide to move to Phase 3 localization?
Answer, Harsha Kadam, Managing Director and CEO. Works very closely with customers. Every phase is customer-sign-off gated because field failures are costly. Same controlled approach is now being replicated with suppliers for Phase 3 child-part sourcing.
26. Industrial localization and import content
Questioner, Unknown
Question. On the industrial side - what is the import content of finished products? Is localization similar to auto at ~90%?
Answer, Harsha Kadam, Managing Director and CEO. Industrial import of finished products (bearings) is down to 18-20%. Hardevi added: overall localization 80%; automotive 90%; industrial 65-70%. Industrial localization is gated by single-digit sector growth in India - large diameter wind bearings (6MW) cannot be made economically at 1-2 pieces/month, so they are imported until volumes justify localization.
27. Margin risk from industrial + e-axle growth
Questioner, Unknown
Question. If growth vectors are industrial plus e-axle, is it fair to say margin will be a little risky to assume, given FX exposure?
Answer, Hardevi Vazirani, Director - Finance and CFO. Based on YTD June performance we will cross INR 10,000 crores. This kind of business can absorb cost of capital of new products easily. Harsha added: localization on the industrial side is going in a big way; volumes are the gating factor, not willingness to invest.
28. Humanoid opportunity in India
Questioner, Unknown
Question. Schaeffler parent has talked about humanoids - is any research being done by the India entity?
Answer, Harsha Kadam, Managing Director and CEO. India has limited humanoid use today. Schaeffler has the competence abroad - eight product families as a motion tech company cover rotary and linear actuators, bearings within them, sensors (Vitesco), battery management (replicated from cars), power electronics. Natural progression. India can develop for the world; production unlikely unless it becomes a clear export strategy. Adoption likely slower in India than Korea/Japan - even Europe has not seen much humanoid rollout yet.
29. Group e-mobility losses and transfer pricing
Questioner, Unknown
Question. The group e-mobility business is at a loss, not by and large. In India, could there be a transfer pricing angle / export angle since India is an attractive market?
Answer, Harsha Kadam, Managing Director and CEO. Automotive OEMs don't import from outside India - that's why Schaeffler's auto localization is above 95%. Tier 1s want a supply base around them. Small shift starting: Ford and Stellantis are not making cars in India but making engines/transmissions and shipping back, with the supply base local. Even the auto industry is redefining; will have to wait and watch how this shapes out.
30. Spherical and cylindrical bearings price pressure
Questioner, Unknown
Question. In the spherical and cylindrical bearings space - are we seeing any price pressure because of competition?
Answer, Hardevi Vazirani, Director - Finance and CFO. So far we have not done any price [cuts]. Harsha added: not experienced challenges there; demand is more for further localization, particularly large-size cylindricals - opportunity to localize more. Described as 'more positive' on this front.
What was said
In their words
We export to China. Can you believe that? We're so competitive. A lot of exports from India, bearings goes back to China today. 13% of our export is going to China. Who would believe this?
Our export strategy is a subset of our localization strategy... 3, 4 years back, we were in the range of 60% - 65%, and today we are hovering at about 80%, which means 80% of our need we locally produce is proof enough that our localization strategy is the prevalent strategy.
100% import. Yes, so it's a low margin compared to ICE, of course, but then unless and until you reach those volumes and localize, you have to take that risk. Otherwise, you are out of the market.
To check next time
What management committed to on this call, or the dates they gave.
- Shoolagiri Phase 2 capex number and second production line progress
- E-axle transition from Phase 2 (sub-component assembly) to Phase 3 (child parts)
- Industrial segment growth trajectory versus auto double-digit pace
- Wind Hall 3 at Savli construction milestones and 6 MW bearing volumes
- Vitesco legal integration update and any timeline clarity
- Book-to-bill ratio maintenance above 1 as growth indicator
Transcript
We have not transcribed this call's recording. Read the company's transcript (PDF).
The stock after the call
| After the call | Close | Stock | Nifty 50 |
|---|---|---|---|
| Next session Mon 28 Sept 2026 | ₹3,955.50 | −1.30% | −1.56% |
| 5 sessions Mon 5 Oct 2026 | ₹3,845.00 | −4.06% | −2.53% |
From the close of Fri 25 Sept 2026, ₹4,007.70: the close before the call day (the call's time is not on file). Adjusted daily closes; the move includes everything else that happened in those sessions.