Schaeffler India revenue grows 27.4% as cash flow falls

Schaeffler India Limited reported Q3 2026 revenue of Rs 3,005.8 crore, up 27.4% year on year, while free cash flow fell 81.7% to Rs 40.8 crore. Schaeffler India attributed the cash-flow decline to higher working capital, mainly inventories and overdues, as quarterly capital expenditure increased to Rs 182.2 crore.

Why did Schaeffler India’s Q3 revenue increase?

Schaeffler India’s Q3 2026 revenue increased because every reported business recorded double-digit year-on-year growth. Revenue reached Rs 3,005.8 crore, compared with Rs 2,360.1 crore in Q3 2025 and Rs 2,681.4 crore in Q2 2026, producing 27.4% year-on-year and 12.1% quarter-on-quarter growth.

Domestic business grew 24.0% year on year and exports increased 46.3%. Automotive Technologies rose 34.9% year on year and 17.3% quarter on quarter, ahead of Vehicle Lifetime Solutions at 22.0% and 2.0%, respectively, and Bearings and Industrial Solutions at 14.7% and 10.2%.

Automotive Technologies accounted for 37% of Q3 2026 sales, while Bearings and Industrial Solutions represented 35%. Vehicle Lifetime Solutions contributed 11% and Exports & Others 17%; Schaeffler India says the latter category mainly includes group-company exports, scrap sales and other operating income.

How did Schaeffler India’s profitability change in Q3 2026?

Schaeffler India’s profit increased in rupee terms, while reported margins declined from both the preceding quarter and the prior-year period. Earnings before interest, tax, depreciation and amortization (EBITDA), before exceptional items, rose 18.0% year on year to Rs 561.7 crore, but its margin was 18.7%, versus 20.2% in Q3 2025 and 19.1% in Q2 2026.

Profit after tax (PAT) rose 20.8% year on year to Rs 370.4 crore from Rs 306.7 crore and was above Rs 336.7 crore in Q2 2026. The PAT margin, however, declined to 12.3% from 13.0% a year earlier and 12.6% sequentially. Earnings before tax were Rs 497.0 crore, with a 16.5% margin, compared with 17.5% in Q3 2025.

Management said earnings quality was marginally affected by increased input prices, fuel prices and a depreciating Indian rupee. The EBITDA bridge showed a Rs 192.1 crore gross-margin contribution from Q3 2025 to Q3 2026, partly offset by Rs 44.0 crore of higher employee cost and Rs 62.4 crore in other income and other items.

Why did Schaeffler India’s free cash flow fall?

Schaeffler India’s free cash flow fell because working capital increased and capital expenditure accelerated. Free cash flow was Rs 40.8 crore in Q3 2026, down from Rs 223.2 crore in Q3 2025 and Rs 96.5 crore in Q2 2026. Management identified inventories and overdues as the main drivers of the working-capital increase.

Working capital reached Rs 2,248.1 crore in Q3 2026, compared with Rs 2,029.1 crore in Q2 2026 and Rs 1,694.2 crore in Q3 2025. At 9M 2026, working capital was 20.7% of sales, up from 19.7% at 6M 2026 and 19.0% at 9M 2025.

Capital expenditure, including capital work in progress, was Rs 182.2 crore in Q3 2026, versus Rs 84.3 crore in Q3 2025 and Rs 95.8 crore in Q2 2026. Schaeffler India spent Rs 356.8 crore in 9M 2026, compared with Rs 267.0 crore in 9M 2025, and said its capital-expenditure framework remains on track.

Which Schaeffler India businesses drove Q3 growth?

Schaeffler India’s Automotive Technologies business recorded the highest growth among its reported operating segments, expanding 34.9% year on year in Q3 2026. Its 17.3% sequential growth also exceeded total revenue growth of 12.1%, and the business accounted for 37% of the quarterly sales mix.

Bearings and Industrial Solutions, which represented 35% of Q3 sales, grew 14.7% year on year. The presentation identifies rail, renewable energy, steel and cement as demand drivers and cites high-value rail and wind projects, heavy-industry orders, and more than 10,000 square metres of added Savli capacity for spherical roller bearings.

Vehicle Lifetime Solutions increased 22.0% year on year and represented 11% of Q3 sales, although its sequential growth was 2.0%. Its segmental revenue was Rs 1,139.8 crore in calendar year 2025, after Rs 1,016.3 crore in 2024 and Rs 681.3 crore in 2023; Schaeffler India lists e-commerce, brand visibility and training among its priorities.

What does Schaeffler India need to monitor after Q3 2026?

Schaeffler India needs to monitor inventories and overdues because management identified them as the main causes of higher working capital. The 20.7% working-capital-to-sales ratio at 9M 2026 coincided with free cash flow of Rs 274.2 crore, down from Rs 747.1 crore in 9M 2025.

Margin movement is also relevant after EBITDA margin declined to 18.7% in Q3 2026 from 20.2% in Q3 2025. Management cited input costs, fuel prices and currency effects, while the presentation reported net interest income of Rs 25.2 crore in Q3 2026, compared with Rs 20.9 crore a year earlier.

Schaeffler India did not disclose a full-year free-cash-flow target, a working-capital target or a full-year capital-expenditure amount. Its 9M 2026 revenue was Rs 8,194.2 crore, up 21.4% from Rs 6,752.3 crore, providing the base for the final-quarter comparison.

Conclusion

Schaeffler India delivered faster Q3 2026 sales growth than in the comparable period, with revenue rising 27.4% and PAT increasing 20.8%. The quarter also showed a different cash outcome: higher inventories, overdues and capital expenditure coincided with an 81.7% fall in free cash flow, while EBITDA and PAT margins declined.

The next disclosure will show whether management’s focus on working capital reduces the 20.7% 9M working-capital-to-sales ratio and supports cash generation. It will also indicate how continued spending under the stated on-track capital-expenditure framework affects free cash flow after Rs 356.8 crore of 9M 2026 capex.