Schaeffler India Powers Ahead with Strong Q3 CY25 Performance

Schaeffler India Limited, a key player in the motion technology sector, has reported a robust performance for the third quarter of calendar year 2025 (Q3 CY25), showcasing significant growth and strategic advancements. The company's standalone revenue for the quarter stood at INR 2,360.1 crore, marking an impressive 13.9% year-on-year growth. This strong top-line expansion was complemented by a notable improvement in profitability, with EBITDA margins crossing the 20% threshold for the first time, reaching 20.2%. Profit After Tax (PAT) also saw a healthy increase, reflecting efficient operations and strategic cost management.

The company's performance was largely driven by its Automotive Technologies segment and intercompany exports, which demonstrated strong momentum. Management highlighted that the localization content increased to 79% in Q3, a testament to their commitment to domestic manufacturing and fixed cost absorption. This focus on localization, coupled with volume gains, played a crucial role in enhancing operating margins. Despite some headwinds in specific industrial sectors, Schaeffler India's overall financial health appears strong, supported by robust free cash flow generation.

Segmental Dynamics and Strategic Initiatives

Schaeffler India's revenue split for Q3 CY25 reveals a diversified business model. The Bearings & Industrial Solutions segment contributed the largest share at 38% (INR 896.84 crore), followed closely by Automotive Technologies at 35% (INR 826.04 crore). Intercompany Exports & Others accounted for 15% (INR 354.02 crore), and Vehicle Lifetime Solutions (aftermarket) made up 12% (INR 283.21 crore). This balanced portfolio helps mitigate risks across different market cycles.

The company's strategic initiatives are clearly aligned with market demands and government policies. In Automotive Technologies, new business wins were secured for hydraulic tensioners in the Passenger Vehicle segment and heavy-duty clutches in the Commercial Vehicle segment. The Vehicle Lifetime Solutions segment saw the innovative launch of an automotive lube vending machine, a pilot project aimed at expanding market coverage. For Bearings and Industrial Solutions, the launch of large-size Spherical Roller Bearings and accessories, manufactured at the Savli plant, targets critical industries like steel, cement, and mining, further strengthening localization efforts.

Management Outlook and Future Trajectory

Management expressed optimism regarding the upcoming quarters, anticipating a strong uptick in passenger vehicle demand in November and December, driven by the recently announced GST reforms. The tractor segment is also expected to show accelerated performance, supported by favorable monsoons and increased Minimum Support Prices (MSP). The company remains committed to achieving double-digit business growth and sustaining its improved operating margins, leveraging its investments in capacity and localization.

While the e-commerce platform, KRSV Innovative Auto Solutions (Koovers), is currently operating at a loss, management has a clear plan for its expansion and expects it to achieve breakeven by 2027. This long-term view on strategic investments underscores a disciplined approach to capital allocation. The company's focus on prudent financial management and long-term value creation positions it well to capitalize on emerging opportunities in the Indian market. Schaeffler India's Q3 CY25 performance reflects a company on track to build a leading motion technology enterprise, demonstrating resilience and strategic clarity amidst evolving market dynamics.