Schaeffler India Q2 Results: Revenue Climbs 17.5% YoY as Automotive Business Maintains Double-Digit Growth

What Happened ?

key details

Revenue Growth Across Core Businesses:

Schaeffler India maintained strong business momentum during the second quarter of FY26, supported by healthy demand across its key operating segments.

Revenue from operations increased 17.5% year-on-year to ₹2,681.4 crore, while sequential revenue grew 7.0% over the previous quarter, reflecting continued execution despite a challenging macroeconomic environment. For the first half of FY26, revenue reached ₹5,188.4 crore, representing an 18.1% YoYincrease.

Automotive Technologies Continues Growth:

The company reported continued double-digit growth in its Automotive Technologies business during both the quarter and the first half of FY26.

Demand across automotive applications remained healthy, contributing significantly to overall revenue growth despite volatility in the broader market environment. 

Vehicle Lifetime Solutions:

Schaeffler India’s Vehicle Lifetime Solutions business also sustained its double-digit growth trajectory, supported by continued demand in the automotive aftermarket.

The segment remained an important contributor to revenue diversification and reflects the company’s focus on serving customers throughout the vehicle lifecycle. 

Intercompany Exports:

The company continued to benefit from strong growth in Intercompany Exports, highlighting sustained demand from global Schaeffler operations.

Export performance supported overall revenue growth and reinforced the company’s role within the Schaeffler Group’s international manufacturing and supply network. 

Profitability and Margin Performance:

While earnings remained healthy, profitability margins moderated slightly due to higher operating costs.

• PBT Margin: 16.9% in Q2 FY26 compared with 17.4% in Q2 FY25 and 17.0% in Q1 FY26.
• Net Profit Margin: 12.6% for the quarter.
• H1 FY26 PBT Margin: 16.9%, compared with 17.2% in the corresponding period of the previous year.

The modest decline in margins reflects higher cost pressures arising from geopolitical developments rather than weakness in underlying business demand.

Business Outlook:

Management indicated that the company remains focused on sustaining its growth momentum through the remainder of FY26.

Despite macroeconomic uncertainty and geopolitical challenges, Schaeffler expects continued support from its Automotive Technologies, Vehicle Lifetime Solutions and Intercompany Export businesses while maintaining disciplined execution and earnings quality.

Note:

• Although Schaeffler India delivered robust double-digit revenue growth and healthy profitability during Q2 and H1 FY26, management acknowledged that geopolitical cost pressures marginally impacted earnings quality.
• Investors are likely to monitor future margin trends, demand across the automotive sector and the company’s ability to sustain profitable growth in the coming quarters.

Risk Analysis

Summary:

• Schaeffler India delivered another quarter of strong revenue growth and healthy profitability despite operating in a volatile macroeconomic environment.
• However, management acknowledged that earnings quality was marginally affected by cost pressures arising from geopolitical developments. Going forward, sustaining margins while maintaining growth across key business segments will remain an important focus for investors. 

Key Risks:

• Geopolitical Cost Pressures: Rising input and supply chain costs due to geopolitical developments could continue to impact profitability.
• Margin Compression: Although revenue growth remains strong, sustained cost inflation may put pressure on operating and PBT margins.
• Automotive Industry Cyclicality: Demand is closely linked to vehicle production and broader economic activity, making the business susceptible to industry slowdowns.
• Macroeconomic Uncertainty: Inflation, interest rates and global economic volatility could influence customer demand across automotive and industrial segments.
• Export Market Risks: Growth in Intercompany Exports depends on global demand and foreign market conditions, which may fluctuate over time.

Worst Case:

• If geopolitical tensions intensify or automotive demand weakens significantly, higher costs coupled with softer volumes could reduce profitability and slow the company’s growth momentum.

Risk Level: Medium

Company Commentary

Commenting on the results, Harsha Kadam, Managing Director & Chief Executive Officer, said the company delivered a strong first half of FY26 with 18.1% revenue growth, supported by continued double-digit expansion in Automotive Technologies, Vehicle Lifetime Solutions and Intercompany Exports.

He noted that despite a challenging market environment, Schaeffler India achieved 7% quarter-on-quarter revenue growth. While earnings quality was marginally impacted by geopolitical cost pressures, the company maintained consistent financial performance amid macroeconomic volatility. Management also reaffirmed its commitment to sustaining growth momentum during the remainder of the financial year.