Strong Buy

Last Updated: 24 Feb 2026, 06:46 pm IST | Report Date: Feb 24, 2026

Schaeffler India Limited Stock Analysis

Name: Schaeffler India Limited (SCHAEFFLER) Stock Analysis
Brand: NSE India
Rating: 8.5 (1 reviews)

SCHAEFFLER NSE India

Schaeffler India Limited (SCHAEFFLER) is a India-based company listed on NSE. This AI-powered analysis provides investment insights based on quarterly earnings reports and financial performance metrics.

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Schaeffler India delivered exceptional FY2025 performance with revenue growing 16.3% YoY to ₹93,953 million and PAT surging 22.4% to ₹11,963 million on a standalone basis, demonstrating strong operational leverage. The company maintained robust EBITDA margins at ~19.5% (calculated from segment profits) while generating exceptional operating cash flow of ₹13,425 million, up 52% YoY, reflecting superior earnings quality and working capital efficiency. The balance sheet remains fortress-like with net cash position of ₹17,688 million (cash of ₹18,408 million vs negligible debt), ROE expanded to ~19.5%, and the board recommended a generous dividend of ₹35 per share (face value ₹2), representing a 75% payout ratio. The Q4 FY2025 momentum was particularly strong with 27% YoY revenue growth and 31.5% PAT growth, indicating accelerating demand across automotive and industrial segments.

Based on: Schaeffler India Limited - Financial Results (24/2/2026) (Feb 24, 2026)

+ Key Strengths

Revenue growth accelerated to 16.3% YoY for FY2025 (₹93,953 million vs ₹80,763 million), with Q4 showing exceptional 27% YoY growth (₹26,431 million vs ₹20,823 million), indicating strong momentum across all segments

Profitability expansion was remarkable with standalone PAT growing 22.4% YoY to ₹11,963 million (margin expanding from 12.1% to 12.7%), demonstrating strong operating leverage and cost management despite ₹210 million one-time gratuity impact from new Labour Codes

Cash flow generation was exceptional with operating cash flow of ₹13,425 million (up 52% YoY) and free cash flow of ₹9,467 million after ₹4,554 million capex, reflecting high-quality earnings and efficient working capital management

Balance sheet strength is fortress-like with ₹18,408 million in cash and bank balances against negligible debt (lease liabilities only ₹390 million), providing ample financial flexibility for growth investments and shareholder returns

Automotive Technologies segment showed strong recovery with 24.6% YoY growth to ₹31,373 million, while Bearings & Industrial Solutions grew 6.5% to ₹36,865 million, demonstrating diversified growth drivers across mobility and industrial applications

Generous dividend of ₹35 per share (1,750% on face value) reflects management confidence and commitment to shareholder returns, representing ₹5,466 million total payout while retaining ₹6,497 million for growth investments

- Key Risks

Employee benefit expenses surged 10.6% YoY to ₹5,780 million with Q4 absorbing a one-time ₹210 million gratuity provision due to new Labour Code implementation, which may result in additional costs as Central/State rules are finalized

Inventory levels increased significantly by 20.3% to ₹17,492 million (from ₹14,541 million), potentially indicating slower turnover or demand anticipation risks, while also tying up ₹3,300 million in working capital

Subsidiary KRSV Innovative Auto Solutions required a ₹199 million impairment charge on long-term investment during the year, raising concerns about its business viability and potential for further write-downs

Trade receivables increased 27.4% to ₹16,231 million outpacing revenue growth of 16.3%, with provisions for doubtful debts rising to ₹164 million from ₹0.6 million, indicating potential collection challenges or credit quality deterioration

Concentrated customer dependence in automotive sector (Automotive Technologies + Vehicle Lifetime Solutions represent 45.5% of revenue) exposes the company to cyclical risks and OEM destocking or slowdown scenarios

Depreciation expense jumped 22.3% YoY to ₹3,288 million reflecting aggressive capex of ₹4,554 million in FY2025 and ₹7,419 million in FY2024, which will continue pressuring margins as new assets are capitalized from ₹3,345 million CWIP

Forward Outlook

The company is executing a significant capacity expansion strategy with ongoing capex of ₹3,345 million in capital work-in-progress as of December 31, 2025, following ₹4,554 million invested in FY2025, positioning it for sustained growth in automotive electrification and industrial automation segments. The strong Q4 momentum (27% revenue growth, highest quarterly revenue ever at ₹26,431 million) suggests demand trajectory remains robust entering FY2026, particularly in Automotive Technologies which accelerated from 24.6% growth for the full year. Management's confidence is evident in the 16.7% dividend increase (₹35 vs ₹30 previous year) and retention of ₹1,420 million cash despite ₹4,377 million dividend payout, indicating expectations for continued strong cash generation. However, near-term margin pressure from Labour Code implementation and ongoing depreciation from recent capex investments bears monitoring. The 63rd AGM scheduled for April 30, 2026 may provide further strategic clarity on FY2026 growth plans and the deployment of the substantial ₹17,688 million net cash position for organic or inorganic expansion opportunities.

All Scores

Date	Report	Score	Sentiment	AI
Feb 24, 2026	Schaeffler India Limited - Financial Results (24/2/2026)	8.5	Strong Buy	Claude
Schaeffler India delivered exceptional FY2025 performance with revenue growing 16.3% YoY to ₹93,953 million and PAT surging 22.4% to ₹11,963 million on a standalone basis, demonstrating strong operational leverage. The company maintained robust EBITDA margins at ~19.5% (calculated from segment profits) while generating exceptional operating cash flow of ₹13,425 million, up 52% YoY, reflecting superior earnings quality and working capital efficiency. The balance sheet remains fortress-like with net cash position of ₹17,688 million (cash of ₹18,408 million vs negligible debt), ROE expanded to ~19.5%, and the board recommended a generous dividend of ₹35 per share (face value ₹2), representing a 75% payout ratio. The Q4 FY2025 momentum was particularly strong with 27% YoY revenue growth and 31.5% PAT growth, indicating accelerating demand across automotive and industrial segments. STRENGTHS: Revenue growth accelerated to 16.3% YoY for FY2025 (₹93,953 million vs ₹80,763 million), with Q4 showing exceptional 27% YoY growth (₹26,431 million vs ₹20,823 million), indicating strong momentum across all segments / Profitability expansion was remarkable with standalone PAT growing 22.4% YoY to ₹11,963 million (margin expanding from 12.1% to 12.7%), demonstrating strong operating leverage and cost management despite ₹210 million one-time gratuity impact from new Labour Codes / Cash flow generation was exceptional with operating cash flow of ₹13,425 million (up 52% YoY) and free cash flow of ₹9,467 million after ₹4,554 million capex, reflecting high-quality earnings and efficient working capital management / Balance sheet strength is fortress-like with ₹18,408 million in cash and bank balances against negligible debt (lease liabilities only ₹390 million), providing ample financial flexibility for growth investments and shareholder returns / Automotive Technologies segment showed strong recovery with 24.6% YoY growth to ₹31,373 million, while Bearings & Industrial Solutions grew 6.5% to ₹36,865 million, demonstrating diversified growth drivers across mobility and industrial applications / Generous dividend of ₹35 per share (1,750% on face value) reflects management confidence and commitment to shareholder returns, representing ₹5,466 million total payout while retaining ₹6,497 million for growth investments RISKS: Employee benefit expenses surged 10.6% YoY to ₹5,780 million with Q4 absorbing a one-time ₹210 million gratuity provision due to new Labour Code implementation, which may result in additional costs as Central/State rules are finalized / Inventory levels increased significantly by 20.3% to ₹17,492 million (from ₹14,541 million), potentially indicating slower turnover or demand anticipation risks, while also tying up ₹3,300 million in working capital / Subsidiary KRSV Innovative Auto Solutions required a ₹199 million impairment charge on long-term investment during the year, raising concerns about its business viability and potential for further write-downs / Trade receivables increased 27.4% to ₹16,231 million outpacing revenue growth of 16.3%, with provisions for doubtful debts rising to ₹164 million from ₹0.6 million, indicating potential collection challenges or credit quality deterioration / Concentrated customer dependence in automotive sector (Automotive Technologies + Vehicle Lifetime Solutions represent 45.5% of revenue) exposes the company to cyclical risks and OEM destocking or slowdown scenarios / Depreciation expense jumped 22.3% YoY to ₹3,288 million reflecting aggressive capex of ₹4,554 million in FY2025 and ₹7,419 million in FY2024, which will continue pressuring margins as new assets are capitalized from ₹3,345 million CWIP

What is the AI Stock Score?

The AI Stock Score is a composite rating from 0-10 generated by analyzing quarterly earnings reports using three leading AI models (Google Gemini, Anthropic Claude, and OpenAI ChatGPT). Each AI independently evaluates financial performance, growth prospects, risks, and market positioning to provide an objective investment perspective.

How should I interpret Buy/Hold/Sell ratings?

Buy (7.0-10.0): Strong fundamentals and positive outlook. Hold (4.0-6.9): Mixed signals, suitable for existing positions. Sell (0-3.9): Deteriorating fundamentals or significant risks. These are AI-generated opinions for informational purposes only, not investment advice.

How is the composite score calculated?

The composite score is the mathematical average of the latest scores from each AI provider. For example, if Gemini rates 7.5, Claude rates 4.5, and ChatGPT rates 6.0, the composite score would be (7.5+4.5+6.0)/3 = 6.0. This multi-AI approach reduces bias from any single model.

How often are scores updated?

Scores are automatically generated within hours of quarterly earnings results being published on NSE. The system monitors earnings announcements 4 times daily and processes new reports immediately. Check the "Last Updated" date at the top of this page for the most recent analysis timestamp.

Is this financial advice?

No. This is AI-generated analysis for informational and educational purposes only. MarketsHost is not a SEBI-registered Research Analyst or Investment Adviser. AI models can produce inaccurate results. Always consult a qualified financial advisor and conduct your own due diligence before making investment decisions.