Schaeffler India Ltd expects to sustain its domestic and export growth momentum in 2026, even as the company closely monitors supply chain disruptions and input cost inflation arising from the West Asia conflict, Managing Director and Chief Executive Officer Harsha Kadam said during the company’s post-earnings analyst call.

Kadam said the company does not see major concerns in meeting its committed numbers for the year, though the operating environment will require close monitoring and agility. “In spite of the strong headwinds that we are facing on our supply chain front, due to the evolving situation in the Middle East, we have continued to keep our focus. We started our crisis management team meetings daily to ensure the supply chain continues to stay intact,” Kadam said.

He added that the company remains prepared to deal with the evolving situation. “We do not see major concerns in terms of delivering the numbers that we are committed to delivering this year. Of course, it would require a lot of monitoring as well as agility on our part,” he said.

On exports, Director Finance and Chief Financial Officer Hardevi Vazirani said the company’s order book remains strong across key geographies, including Europe, China, Southeast Asia and the Americas. She said export growth is likely to settle in the range of 10-12% for the full year.

“If we see year-on-year, we see over 30% growth in Q1. But if we look at Q4, because we ramped up significantly last year from Q1 to Q4, the growth is at 6.6%. And very likely, if we go run rate of the full year, we will be close to 10% to 12%,” Vazirani said.

She added that there was no visible dip in export demand at present. “The key geographies that we serve are Europe, China, some Southeast Asian countries, Americas. And we do not see any dip in demand right now. The order book for the year is solid,” she said.

Schaeffler India’s exports are largely inter-company exports to group entities, which then sell to end customers. Vazirani said the outlook is being supported by improved localisation and stronger India capabilities, especially in bearings.

“If the order book is good, since we have been doing a lot of localisation and the products, specifically when we talk about bearing, the capabilities in India have improved. Thereby, we see more and more orders coming from all the economies of Europe, China, Southeast Asia, etc,” she said.

Q1 Performance

Schaeffler India reported revenue from operations of Rs 2,507 crore in Q1 CY26, up 18.8% from Rs 2,110 crore in Q1 CY25. Sequentially, revenue declined 5.1% from Rs 2,643 crore in Q4CY25.

The company said year-on-year double-digit growth momentum was sustained in Automotive Technologies, Vehicle Lifetime Solutions and exports, while domestic business grew 16.4% year-on-year. However, the domestic business declined 7.2% sequentially, impacted by ongoing geopolitical conflicts.

Automotive Technologies grew 30.8% year-on-year, Vehicle Lifetime Solutions rose 18.1%, Bearings and Industrial Solutions grew 4.2%, while Intercompany Exports and others rose 32.5%. On a sequential basis, Intercompany Exports and others grew 6.6%, while Automotive Technologies declined 1.3%, Vehicle Lifetime Solutions slipped 0.6%, and Bearings and Industrial Solutions fell 14.3%.

The automotive and industrial component maker’s EBITDA stood at Rs 483 crore in Q1CY26, up 18.6% year-on-year from Rs 407 crore, but down 4.5% sequentially from Rs 506 crore. EBITDA margin stood at 19.3%, flat year-on-year and slightly higher than 19.1% in Q4CY25.

Profit after tax stood at Rs 319.7 crore, up 20.5% year-on-year from Rs 265.4 crore, but down 2.5% sequentially from Rs 328 crore. PAT margin stood at 12.8%, compared with 12.6% in Q1CY25 and 12.4% in Q4CY25.

Kadam said the quarter was resilient despite external pressures. “I must say it has been a reasonably good quarter performance from our point of view, despite strong headwinds on the supply chain area, particularly with the Middle East crisis that evolved into the supply chain getting impacted. We have been able to weather the headwinds and continue to deliver and create value for all our stakeholders,” he said.

In its press release, the company said localisation benefits and capital efficiency helped sustain earnings quality despite supply chain challenges and inflationary headwinds.

Input Cost Inflation

The West Asia conflict has started pushing up input costs, particularly for fuel-linked items such as LPG and propane, Kadam said. “As you are aware, the situation in West Asia has clearly resulted in choking up the supply chains for the fuel. So LPG, propane, and some of the fuel items, which India relies heavily on imports, has been impacted, and the prices definitely have gone up there,” he said.

He added that Schaeffler has started looking at alternate sourcing routes, stocking up key materials and exploring the possibility of compensation from customers.

However, he cautioned that it is still too early to assess the full recovery of cost increases. “It’s just been a month and a half since the inflationary increases have happened. I guess time will tell us how successful we will get in terms of adjusting these cost increases or accommodating these cost increases or getting compensation for these costs,” he said.

Vazirani said recovery of input cost increases generally takes time. “It takes somewhere between six months and 18 months to have the full recovery. We have the first batch of price increases realised from Q2 onwards. However, for the full realisation, it takes close to six quarters,” she said.

2026 Capex 

Schaeffler India plans to spend Rs 400-500 crore on capex in 2026, with management indicating that investments will continue despite some moderation in the March quarter.

“Capex will be in the range of what we had earlier, Rs 400 to 500 crores investment this year,” Vazirani said. “Last year, we had rationalised a little bit. But this year, again, we will be picking up and going in that range of 500 crores.”

In Q1CY26, Schaeffler India’s capex stood at Rs 78.8 crore, compared with Rs 82.5 crore in Q1CY25 and Rs 116.6 crore in Q4CY25. Free cash flow stood at Rs 136.9 crore, down 42.2% year-on-year, impacted by higher working capital to meet rising demand in Automotive Technologies.

Kadam said the moderation in Q1 capex was only a timing issue and not a cutback in investment plans. “While we have judiciously moderated our CapEx spend, looking at the market demand and the portfolio demands, but it does not mean that we are going to cut down on CapEx. It's just a timing phase that we moderated for the quarter. However, as the customer's projects begin to take and evolve, we are going to continue our investment initiatives,” he said.

The company said its capex framework remains on track, supported by continued growth in its core business segments and export order book.