Any current/future capex/capital investment/strategic investment?

Capex is split into three categories: new plants and buildings, backward integration (localization of components), and capacity expansion for finished goods. All capex plans laid out in 2022 are on track and being realized on time. Investments are being made to localize railway products, with new production lines under development. The company plans to expand Koovers (a startup subsidiary) across India in two years, requiring funding support from Schaeffler India Limited. Capex also supports capacity to combat inflationary pressures and improve margins. Capex related to localization aims to ma

Future growth expectations in sales/revenue/volumes?

Steady growth observed with Q2 sales crossing INR 2,000 crores, a 12% increase over Q1 and 13.3% YoY. Bearings and Industrial Solutions segment grew 16-17% YoY, driven purely by volume growth, with robust demand in engine applications, power transmission, railways, and renewable wind sector. Optimism on tractor segment growth due to favorable monsoon. Export business showing a cautious but optimistic uptick, especially to Europe and Southeast Asia, expected to hover around 10-15% of total sales. Koovers (a startup subsidiary) expanding across India with a growth roadmap but breakeven expected

Future growth expectations in earnings/operating earnings/profits/EPS?

Schaeffler India Limited expects steady growth, supported by factors like increased volume sales, especially in Bearings and Industrial Solutions (16%-17% YoY volume-driven growth). Automotive Technologies business shows strong growth (~11%-12%), backed by content increase, market share gains, and new business wins. The Koovers start-up business is expanding with plans to scale nationwide over two years, but breakeven is expected only after three years. New business wins in electric vehicle components (like the E-axle program) are on track, indicating future revenue streams. The company is cau

Current/ Expected Orderbook/ Pending Orders?

The company has visibility into order inflows primarily from its export business to Europe, which supplies sister companies there. There has been a noticeable uptick in order inflows over the last two months, indicating some demand resurgence in the European market. The improvement is not yet strong compared to earlier years but shows positive momentum. Order inflows are driven by both gradual recovery in European demand and India's cost competitiveness. On the E-axle program, new orders are on track with ongoing customer validation of samples, and no changes in customer launch plans. The comp

Schaeffler India LtdQ1 FY25Auto Components

Schaeffler India Ltd Q1 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹3,886P/E: 48.5Market Cap: ₹62.6K CrSector: Auto Components

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

Steady growth observed with Q2 sales crossing INR 2,000 crores, a 12% increase over Q1 and 13.3% YoY.
Bearings and Industrial Solutions segment grew 16-17% YoY, driven purely by volume growth, with robust demand in engine applications, power transmission, railways, and renewable wind sector.
Optimism on tractor segment growth due to favorable monsoon.
Export business showing a cautious but optimistic uptick, especially to Europe and Southeast Asia, expected to hover around 10-15% of total sales.
Koovers (a startup subsidiary) expanding across India with a growth roadmap but breakeven expected only after 3 years.
New electric vehicle (E-axle) business on track with ongoing sample validation and new business opportunities with multiple manufacturers.
Overall, the company expects continued double-digit growth supported by new business wins, cost competitiveness, and expanding product offerings at system level.

Margin guidance

Category 3

Schaeffler India Limited expects steady growth, supported by factors like increased volume sales, especially in Bearings and Industrial Solutions (16%-17% YoY volume-driven growth).
Automotive Technologies business shows strong growth (~11%-12%), backed by content increase, market share gains, and new business wins.
The Koovers start-up business is expanding with plans to scale nationwide over two years, but breakeven is expected only after three years.
New business wins in electric vehicle components (like the E-axle program) are on track, indicating future revenue streams.
The company is cautiously optimistic about exports maintaining a 10%-15% share; growth is supported by cost competitiveness and entry into Southeast Asia markets.
Working capital and free cash flow are areas of focus to improve operating performance.
Overall, double-digit top-line growth with sustained EBITDA margins (~18.5%) and improving profit after tax (~12%) indicate positive earnings trajectory.

See what Schaeffler India Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

The document does not explicitly mention any current or future fundraising plans through debt or equity. However, relevant points include: - The company is making ongoing capital expenditures (capex) focused on new plants, backward integration (localization of components), and capacity enhancement for finished goods. - Capex investments are being realized according to the plans laid out in 2022. - Working capital and free cash flow management remain areas of focus, with efforts to improve cash flow in succeeding quarters. - No specific mention or guidance on raising funds through debt or equity was disclosed during the call or in the presentation. Therefore, based on the available information, there are no announced fundraising activities via debt or equity at present or mentioned for the near future.

Order book

Yes

The company has visibility into order inflows primarily from its export business to Europe, which supplies sister companies there.
There has been a noticeable uptick in order inflows over the last two months, indicating some demand resurgence in the European market.
The improvement is not yet strong compared to earlier years but shows positive momentum.
Order inflows are driven by both gradual recovery in European demand and India's cost competitiveness.
On the E-axle program, new orders are on track with ongoing customer validation of samples, and no changes in customer launch plans.
The company continues to work with multiple electric vehicle manufacturers for future business wins.
Localization efforts and capex investments are underway to support and expand manufacturing capacity.
The overall export business is expected to hover around 10-15% of total sales, with cautious optimism due to geopolitical risks.

See what Schaeffler India Ltd management said on order book — free account, 30 seconds.

Capex plans

Yes

Capex is split into three categories: new plants and buildings, backward integration (localization of components), and capacity expansion for finished goods.
All capex plans laid out in 2022 are on track and being realized on time.
Investments are being made to localize railway products, with new production lines under development.
The company plans to expand Koovers (a startup subsidiary) across India in two years, requiring funding support from Schaeffler India Limited.
Capex also supports capacity to combat inflationary pressures and improve margins.
Capex related to localization aims to maintain margins amid inflation.
Overall capex investments continue to grow but were marginally lower in Q2 2024 compared to Q1 2024, reflecting judicious and prudent investment mix decisions.

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Schaeffler India Ltd Q1 FY25 Earnings Call Analysis

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