Any current/future new fundraising through debt or equity?

There is no explicit mention of any current or future fundraising through debt or equity in the document. The company emphasizes judicious and flexible investment approaches, focusing on realizing benefits from existing capex rather than immediate new large-scale fundraising. Any additional investments will be driven by new business wins warranting such investments. The company acknowledges that capex may fluctuate depending on business needs but does not indicate plans for raising funds specifically through debt or equity. The focus remains on efficiently leveraging current investments and ma

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

The company announced a capex of INR 1,000 crores initially in 2022, revised to INR 1,500 crores, and has already slightly exceeded this amount by 2024. Most growth- and localization-related capex will be realized by the end of 2024; capex spending will slow down in 2025 to focus on realizing the benefits of prior investments. Additional investments beyond INR 1,500 crores were necessary due to new business wins such as Tata and e-motor axle projects. Capex remains flexible and agile, adjusted according to business needs and market conditions. The greenfield Hosur plant investment is approxima

Future growth expectations in sales/revenue/volumes?

Schaeffler India expects continued double-digit growth in various sectors including automotive technologies, bearings & industrial solutions, and vehicle lifetime solutions, despite some recent challenges in passenger vehicle demand. Industrial sectors like wind energy, railways, raw material sectors, and two-wheelers are showing strong traction and contributing to growth. New business wins, such as the e-motor axle project with Tata and other EV-related contracts, support future growth opportunities. Exports to Southeast Asia are being evaluated with potential in two-wheelers, though gr

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

The company expects new business wins, such as Tata and e-motor axles projects, to drive additional investments and growth beyond initial capex estimates (Page 17). Start-up ventures like KRSV Innovative Auto Solutions are projected to break even by end of 2026 and generate positive cash flow from 2027 onwards (Page 17). Sustained double-digit growth is anticipated across key sectors including railways, two-wheelers, raw materials, and wind energy, with distributorship also targeted for strong growth (Pages 14-15). EBITDA margins saw slight pressure due to inflationary employee costs and absen

Current/ Expected Orderbook/ Pending Orders?

Harsha Kadam mentioned they do not have visibility of the end customer orders or inventory levels beyond their shipments based on received order books. The company ships materials to sister plants, which manage downstream sales and customer orders. Due to this, Schaeffler India Limited does not have direct insights into pending orders or the complete order book status beyond what they produce and dispatch. For European exports, the market is currently sluggish with weak demand and some destocking, but no clear timeline for improvement was shared. Investments and capex plans are aligned with ne

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Schaeffler India LtdQ3 FY24Auto Components

Schaeffler India Ltd Q3 FY24 Earnings Call Analysis

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

Price: ₹4,158P/E: 50.4Market Cap: ₹63.0K CrSector: Auto Components

Management growth scorecard

Revenue

Category 3

Margin

Category 4

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Schaeffler India expects continued double-digit growth in various sectors including automotive technologies, bearings & industrial solutions, and vehicle lifetime solutions, despite some recent challenges in passenger vehicle demand.
→Industrial sectors like wind energy, railways, raw material sectors, and two-wheelers are showing strong traction and contributing to growth.
→New business wins, such as the e-motor axle project with Tata and other EV-related contracts, support future growth opportunities.
→Exports to Southeast Asia are being evaluated with potential in two-wheelers, though growth size may differ from Europe.
→Capex of INR 1,500 crores over 3 years aims to support capacity expansion, localization, and efficiency improvements, with investment remaining agile based on business needs.
→Revenue growth for Q3 FY24 was 12.1% YoY, with automotive technologies growing at 10.7% YoY and bearings & industrial solutions at 13%, indicating strong underlying volume/revenue momentum.
→Cautious outlook on passenger vehicle production due to high inventory but slow growth expected in tractors aided by a good monsoon.

Margin guidance

Category 4

→The company expects new business wins, such as Tata and e-motor axles projects, to drive additional investments and growth beyond initial capex estimates (Page 17).
→Start-up ventures like KRSV Innovative Auto Solutions are projected to break even by end of 2026 and generate positive cash flow from 2027 onwards (Page 17).
→Sustained double-digit growth is anticipated across key sectors including railways, two-wheelers, raw materials, and wind energy, with distributorship also targeted for strong growth (Pages 14-15).
→EBITDA margins saw slight pressure due to inflationary employee costs and absence of one-time incomes, but the company maintains focus on margin improvement (Page 13).
→Continued judicious capex spending aimed at capacity expansion and localization, with a slowdown in capex planned for next year to realize benefits from prior investments (Page 17).
→Overall, Schaeffler expects to maintain growth momentum and profitability, leveraging diversified portfolio and operational agility despite challenging market conditions (Pages 6-8, 17).

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Fundraise plans

Yes

→There is no explicit mention of any current or future fundraising through debt or equity in the document.
→The company emphasizes judicious and flexible investment approaches, focusing on realizing benefits from existing capex rather than immediate new large-scale fundraising.
→Any additional investments will be driven by new business wins warranting such investments.
→The company acknowledges that capex may fluctuate depending on business needs but does not indicate plans for raising funds specifically through debt or equity.
→The focus remains on efficiently leveraging current investments and maintaining agility in capital allocation rather than on raising new funds.

Order book

→Harsha Kadam mentioned they do not have visibility of the end customer orders or inventory levels beyond their shipments based on received order books.
→The company ships materials to sister plants, which manage downstream sales and customer orders.
→Due to this, Schaeffler India Limited does not have direct insights into pending orders or the complete order book status beyond what they produce and dispatch.
→For European exports, the market is currently sluggish with weak demand and some destocking, but no clear timeline for improvement was shared.
→Investments and capex plans are aligned with new business wins, such as the Tata e-motor axles, which were unforeseen when initial investment estimates were made. The order pipeline seems active but details are not fully disclosed.

Capex plans

Yes

→The company announced a capex of INR 1,000 crores initially in 2022, revised to INR 1,500 crores, and has already slightly exceeded this amount by 2024.
→Most growth- and localization-related capex will be realized by the end of 2024; capex spending will slow down in 2025 to focus on realizing the benefits of prior investments.
→Additional investments beyond INR 1,500 crores were necessary due to new business wins such as Tata and e-motor axle projects.
→Capex remains flexible and agile, adjusted according to business needs and market conditions.
→The greenfield Hosur plant investment is approximately INR 300 crores, and production is set to start early 2025, initially for transmission components including clutches, with plans to scale to EV-related products.
→Future investments will be judicious, balancing new opportunities with maximizing utilization of existing capacities.

How does Schaeffler India Ltd rank vs peers in Auto Components?

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1Schaeffler India Ltd

Rev 3Mar 4

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