SCHAEFFLER Q2 FY27 Results Analysis: Revenue Jumps 26.9%, Margins Compress 135 bps

SCHAEFFLER's Q2 FY27 numbers came in strong, with revenue of Rs. 3,089.42 Cr (+26.90% YoY) and PAT growth of +20.70% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Revenue grew 26.9% YoY with all four divisions up double-digit and exports at +46.3% YoY comfortably ahead of the 10-12% CY26 frame, while PAT grew 20.7%. The offset is margin compression of 135 bps YoY to 17.38% as material cost intensity worsened sequentially to 63.24% of revenue, with no H2 indexation recovery yet visible. Execution on growth and export targets remains on track, but the promised H2 cost correction and the widening KRSV subsidiary loss are the key watch items.

Key Investment Insights

Key Positives

• Consolidated revenue grew 26.9% YoY to Rs.3,089.42 Cr and 11.9% QoQ
• Consolidated PAT grew 20.7% YoY to Rs.349.06 Cr; EPS rose to Rs.22.3 from Rs.18.5
• Intercompany Exports & Others grew 46.3% YoY, ahead of management's 10-12% CY26 export frame, with share up to 17.0% of revenue
• Automotive Technologies grew 34.9% YoY; all four divisions grew double-digit YoY
• Industrial ('Others') segment result grew 43.9% YoY with margin up 190 bps YoY to 22.26%
• Employee cost ratio improved to 5.36% of revenue from 6.20% a year ago; other-expense ratio eased to 14.02% from 14.94% QoQ
• Exports contained at 17.0% of revenue, within management's ~20% containment target

Risk Factors

• EBITDA margin compressed 135 bps YoY and 70 bps QoQ to 17.38% (P&L-derived)
• Material cost ratio worsened sequentially to 63.24% of revenue from 61.15% in the June quarter; no H2 indexation recovery visible yet
• Mobility segment margin compressed 157 bps YoY to 12.19%
• Subsidiary KRSV loss widened to Rs.(19.57) Cr from Rs.(17.42) Cr in the June quarter
• Promised H2 cost recovery via FX/steel indexation and LPG/propane OEM negotiation showed no gross-margin recovery in the first H2 quarter