Schaeffler India capex to top ₹500 crore in 2026

Why Schaeffler’s India capex cycle is back in focus

Schaeffler India is preparing to step up capital expenditure in calendar year 2026 after moderating investments in 2025, as it looks to support growth and push deeper localisation across its product portfolio. Management has indicated that capex is expected to return to levels seen during 2022-24, with around ₹500 crore planned in the current year. The plan comes as plant utilisation has moved above 85%, a threshold that typically triggers capacity additions and new product programmes. The company’s broader India strategy has also been underlined by parent Schaeffler AG’s multi-year investment commitments.

Capex guidance: moderation in 2025, step-up from 2026

Schaeffler India’s finance leadership has linked the 2025 moderation to a deliberate focus on utilisation and capital efficiency. Hardevi Vazirani, Director Finance and Chief Financial Officer at Schaeffler India, said capacity utilisation is over 85% and that investments will rise again to support capacity and new product localisation. She added that capex will step up from 2026 to the average levels of the previous three years, at over ₹500 crore to begin with. The capex plan, management said, aligns with the parent group’s five-year strategy for 2026-30 and is expected to scale up gradually as demand grows and new products are localised for the Indian market.

Shoolagiri plant: fifth facility adds powertrain capacity

A key marker of Schaeffler’s expanding footprint was the inauguration of its fifth plant in India at Shoolagiri, Tamil Nadu. The site is positioned as a hub for production and expansion of conventional and electrified powertrain technologies, including planetary gear systems and hybrid transmission components. The facility is designed to increase transmission component capacity significantly, reflecting the company’s push to serve a market where internal combustion engine (ICE) demand remains robust even as it is being phased out in parts of Europe. The new facility adds to Schaeffler India’s four manufacturing facilities and three research and development centres already operating in the country.

Plant size and ramp-up timeline

Schaeffler has disclosed operational details for the Shoolagiri site that indicate a phased commissioning plan. The new facility spans a total plot of 108,000 square metres, with the first phase covering 16,500 square metres. This first phase is expected to reach full operational capacity by the fourth quarter of calendar year 2025. The company has positioned the plant as part of its longer-term effort to expand manufacturing presence in India and support the development of new technologies aimed primarily at the domestic market.

Parent Schaeffler AG’s investment commitments to India

Schaeffler AG has reiterated India’s strategic importance through specific investment guidance. In May 2025, the parent announced plans to invest more than €100 million every year over the next five years to expand operations in India. Separately, Schaeffler AG has also stated that it will invest 500 million euros in India over the next five years, targeting expansion of production capacity, increased localisation, and a stronger presence in areas such as electric mobility, railways, and renewable energy component manufacturing. In another statement, the company described ongoing investments of €500 million (about ₹5,500 crore) earmarked for the next five years.

Localisation: portfolio progress and why it matters

Localisation is a central part of Schaeffler’s India strategy, both for cost and supply-chain resilience. The company has reported that it achieved 78% localisation across its portfolio last year. Within that, almost 90% of its automotive portfolio is localised, while localisation in industrial and bearings has been more gradual, reaching close to 80% over the last six years. In another disclosed set of figures, Schaeffler India said it achieved a 79% localisation ratio, up from 74% previously, following investments over the past three years. The company’s CFO has linked localisation to profitability, noting that EBITDA margin has improved due to localisation-related initiatives, including backward integration, land and buildings, and margin improvement projects.

ICE demand in India and shifting production lines

Schaeffler’s operating approach also reflects differences in powertrain demand by geography. The company has indicated that while ICE technology is being phased out in Europe, demand remains robust in India. As a result, Schaeffler has said it is moving certain production lines from Europe to India. This shift supports both localisation goals and the company’s effort to use Indian capacity to serve not only domestic customers but also global needs, as highlighted by Madhurisha Vippatoori, Vice President (R&D) and CTO, Schaeffler India.

Utilisation above 85% and the push for productivity

With utilisation above 85%, management expects higher investment to back capacity additions and localisation of new products. Alongside capex, the company is focusing on extracting more output from existing assets through productivity improvements and operational efficiency. Management has said plants are working on small measures to improve overall equipment efficiency to absorb higher volumes in the near term. This sequencing helps explain why capex may move in phases, with periods of moderation followed by acceleration based on market demand and localisation opportunities.

Turnover exposure and India growth targets

The Tamil Nadu plant primarily caters to the auto industry, which accounts for about a third of the company’s turnover, according to the disclosures. In another business update, Schaeffler India said it clocked ₹4,500 crore revenue in the last fiscal year in India and is aiming to double turnover to about ₹10,000 crore in the next five years. It also indicated plans to increase the commercial vehicle segment’s contribution to 10% of total revenue from about 7%.

Key figures at a glance

What investors may track next

Investors will watch how quickly the company converts high utilisation into incremental capacity and whether localisation targets continue to move up without pressuring execution timelines. Another monitorable item is the scale and sequencing of the parent group’s India investments under the 2026-30 strategy period cited by management. Schaeffler has also said it is “carefully looking” at establishing a global capability centre in India, which could add another pillar to its local footprint alongside manufacturing and R&D.

Conclusion

Schaeffler India’s plan to lift capex from 2026, alongside a ₹500 crore outlay in the current year, reflects a shift from efficiency-led consolidation to capacity and localisation-led expansion as utilisation stays above 85%. The Shoolagiri plant’s ramp-up by Q4 CY2025 and parent Schaeffler AG’s multi-year investment commitments provide additional visibility on the long-term direction. The next milestones are likely to be updates on phased capex scaling from 2026 and further disclosures on localisation-led product programmes and capacity additions.