Schaeffler India Targets Double Digit Export Growth and Increased Localization

Schaeffler India plans to invest between INR 400 crore and INR 500 crore in capital expenditures during the 2026 calendar year, according to details shared during its CY26 first quarter earnings call. The company reached an overall localization rate of 80 percent during the first quarter.

While the company's overall localization remains high, its industrial segment currently lags at 60 percent, presenting further opportunities for local sourcing. Schaeffler is also working to localize components for its e-axle supply chain, which currently relies heavily on imports from China to maintain competitive pricing.

During the first quarter, the company's industrial segment experienced a 14 percent quarter on quarter revenue decline, although it registered a moderate 6 percent growth on a year on year basis. Management attributed the sequential drop to increased market competition, a demand slowdown in certain sub sectors, temporary liquidity constraints in the industrial aftermarket, and ongoing supply chain disruptions.

Free cash flow for the quarter stood at INR 140 crore, down from INR 240 crore in the same period last year. This reduction was primarily driven by an increase in absolute working capital required to meet rising demand within the Automotive Technologies division. 

The manufacturer projects its export business to grow by 10 to 12 percent in CY26. The company identified Europe, China, Southeast Asia, and the Americas as its primary export geographies. Market analysts anticipate that Schaeffler will sustain double digit revenue growth, supported by these new order wins and an expanding footprint in the aftermarket. The company noted that any increased input costs are typically passed through to customers with a lag of six to 18 months.