Schaeffler India reported a 17.5% year-on-year revenue growth to ₹2,681 crore in Q2 CY26. Despite strong performance, margins were pressured by rising input and freight costs. The company is strategically increasing inventory, impacting free cash flow.
Detailed Coverage
Schaeffler India Q2 CY26 Results: Revenue Grows, Margins Under Pressure
Standalone Revenue: ₹2,681 crore (up 17.5% YoY) Profit After Tax (Standalone): ₹337 crore Reader Takeaway: Strong revenue growth amid market share gains; watch margin recovery from cost pressures. ## What just happened Schaeffler India reported a standalone revenue of ₹2,681 crore for the second quarter of CY26, marking a significant 17.5% increase year-on-year. The company achieved a standalone EBITDA of ₹513 crore, with an EBITDA margin of 19.1%. Profit After Tax (PAT) for the quarter stood at ₹337 crore. The automotive segment showed resilience, gaining market share despite industry fluctuations. However, free cash flow was temporarily impacted due to a strategic increase in inventory levels, bringing working capital to ₹2,029 crore. ## Why this matters Despite robust revenue growth driven by market share gains and export momentum, the company's profitability faced pressure. Increased input costs for commodities like LPG and propane, higher freight charges, and adverse foreign exchange movements impacted margins. Investors will be keen to see the company's success in passing these costs to original equipment manufacturers (OEMs) through price corrections, which management expects in the second half of the year. The company continues its strategic investments in capacity expansion, with a total capital expenditure (capex) target of ₹400-500 crore for CY26. ₹175 crore has already been deployed in the first half of the year. ## The backstory Schaeffler India is a leading automotive and industrial supplier. The company has been focused on expanding its footprint and product offerings, navigating industry cycles and global supply chain dynamics. This quarter's performance reflects ongoing efforts to balance growth with cost management. ## What changes now The company is actively managing cost pressures through dialogue with customers. The strategic inventory build-up, while impacting free cash flow in the short term, is intended to secure supply chains. The ongoing capex plan signals a commitment to future growth and capacity enhancement. ## Risks to watch Key risks include persistent input cost inflation for non-indexed commodities and freight, which could continue to squeeze margins if price pass-throughs are delayed. The subsidiary KRSV (Koovers) continues to operate at a loss, with EBITDA breakeven targeted only by 2029. The temporary impact on free cash flow due to higher working capital also warrants monitoring. ## Peer comparison While specific peer results for Q2 CY26 are not detailed in the filing, Schaeffler India's automotive segment reportedly outperformed the market by gaining share, suggesting competitive positioning. However, the industry as a whole faces similar pressures from input costs and supply chain volatility. ## Context metrics (time-bound) * Standalone Revenue (Q2 CY26): ₹2,681 crore (up 17.5% YoY) * Standalone EBITDA (Q2 CY26): ₹513 crore (EBITDA Margin 19.1%) * Profit After Tax (Standalone, Q2 CY26): ₹337 crore * Working Capital (Q2 CY26): ₹2,029 crore * Capex Deployed (H1 CY26): ₹175 crore * Subsidiary KRSV Revenue (Q2 CY26): ₹79 crore ## What to track next Investors will be tracking management's success in implementing price corrections to offset input cost inflation in the second half of CY26. The recovery of free cash flow as inventory levels normalize, and the progress of the capex program will be key indicators.
