TIMKEN Q2 FY27 Earnings Call: Revenue Jumps 25% YoY, Exports Surge 60%

TIMKEN held its Q2 FY27 earnings call on October 29, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Double-Digit Growth With Margin Expansion

• Standalone revenue of Rs.969 crore — up 25.4% YoY vs Q2 FY 2025-2026 and 4.3% QoQ vs Q1 FY 2026-2027, driven by demand across all key end markets, expanded capacity, and disciplined execution in domestic and export businesses, with a slight delay noted in rail.
• Standalone PBT of Rs.156 crore — up 29.5% YoY vs Rs.120 crore in Q2 FY 2025-2026; PBT margin expanded 50 bps to 16.1% from 15.6%.
• Standalone PAT of Rs.116 crore — up 29.7% YoY vs Rs.89 crore; EBITDA margin was ~19.2% for Q2 FY 2026-2027.
• H1 FY 2026-2027 standalone revenue of ~Rs.1,898 crore — up ~20% YoY, with PBT of Rs.306 crore and PAT of Rs.231 crore (+19% YoY).
• Consolidated revenue of Rs.986 crore — vs Rs.786 crore in Q2 FY 2025-2026; consolidated PBT Rs.162 crore, PAT Rs.120 crore (+~29% YoY); H1 FY 2026-2027 consolidated revenue Rs.1,929 crore with PAT Rs.240 crore.
• Depreciation of Rs.289 million — down from Rs.314 million in Q1 FY 2026-2027, but CFO Sujit Kumar Patnaik attributed this to an accounting reclassification of ~Rs.1.3 crore from other expense to depreciation, with no structural reduction in depreciation.

Exports Surge; Rail Delayed, Domestic Solid

• Exports at Rs.262.7 crore (27% of revenue) — grew 60% YoY and 30% QoQ in Q2 FY 2026-2027; management expects export momentum to remain healthy in coming quarters, with rail gaining traction beyond the immediate quarters as Timken company aligns with North American rail customers' buying behavior.
• Segment mix — Mobile Others Rs.204 crore (21%), Process Rs.190.9 crore (20%), Rail Rs.156.7 crore (16%), Distribution Rs.148.8 crore (15%); segment revenue totaled Rs.969.3 crore plus export incentives.
• Railway tender delayed — the committee is expected to be set up in the next 2-3 weeks, with interim orders already placed on wagon builders; management expects tenders to materialize into orders within ~3 weeks.
• Rs.120 crore railway expansion on target — new line at Jamshedpur to begin trial runs in November-December, followed by PPS and line qualification; train bearing capacity at Bharuch also on target with commissioning and PPAPs expected soon.
• Wind performed well within process industries (ex-CRB/SRB) — the growth outlook for this business was described as "pretty stable," with no specific growth rate provided.
• Chinese and other gearbox manufacturers are moving significant production into India — management said the company is "in a nice spot" to benefit from this shift (third-party trend, not a company commitment).

Bharuch Behind Target; SRB Ahead of CRB

• Bharuch utilization at ~60% overall in Q2 FY 2026-2027 — SRB lines reached 70% (meeting the target promised last quarter) while CRB lines remain below 60% (at ~58-60%); the earlier 70% overall utilization target for September (Q2 FY 2026-2027) has not yet been achieved.
• Bharuch revenue close to Rs.75 crore in Q2 FY 2026-2027 — an improvement over Q1 FY 2026-2027; management does not disclose plant-level margins as it operates as one segment.
• Utilization guided to 70-75% by end of FY 2026-2027 — below the 80-85% level the analyst queried; management concurred Q3 FY 2026-2027 should be better as SRB lines gain more traction.
• SRB and CRB businesses contribute ~Rs.75 crore per quarter — the mix is heavily export-weighted with sales tilted towards intercompany exports, while the domestic ramp (PPs and related activities) is still in progress.
• Industrial margins directionally better than automotive — management said SRB/CRB (industrial) carry better margins than TRBs (automotive) but declined to quantify the gap (analyst asked whether it was 300-500 bps or more); expects a positive effect as the business reaches critical mass, with timing and magnitude not quantified.
• Q3 FY 2026-2027 export seasonality — CFO Sujit Kumar Patnaik flagged that Oct-Dec, the last quarter of the calendar year, typically sees a bit of softening in exports due to the December year-end.

Broad-Based Inflation; Pass-Through Imperative

• Raw material cost as% of revenue rose 130 bps QoQ — CFO Sujit Kumar Patnaik attributed ~50% to unfavorable mix (lower rail share due to the delayed global rail tender) and ~50% to input cost inflation from the cost-price timing gap.
• Carbides up 200% — with steel, gases, and labor costs also rising; CMD Sanjay Koul said the bearing industry cannot absorb these costs and must pass them on to both auto and non-auto customers, though automotive customers may delay the pass-through.
• Cost pressures from new vessels' depreciation and higher fuel and gas costs — cost reduction is a focus area, with management expecting cost to remain a challenge in coming months and years.

Selective in Wind; GGB Bharuch Yet to Capitalize

• Domestic wind market picking up — management said domestic wind consumption had been sluggish (global gearbox makers such as ZF were producing gearboxes mostly for export) but the domestic Indian wind market should remain relevant in India "for some more years," citing rising power demand (data centers coming up) and the need to reduce thermal-based electricity generation.
• Timken India does not manufacture wind bearings — it buys them from Timken sister concerns, which are investing in large-size bearing production domestically; another Timken entity in India is localizing production, already producing certain size ranges with further work underway.
• Selective stance in wind — management endorsed an unnamed competitor's recent comment (cited by the analyst) about becoming selective in wind due to prevalent low-margin business; Timken India serves the gearbox segment rather than the commoditized main shaft, and will pursue main shaft business only if it makes money on it.
• Turbine upsizing trend — Indian OEMs are moving from sub-megawatt to 3 MW platforms with 5 MW coming into picture; management stated 3 MW and 5 MW are likely to remain common in India "for a long time," while globally turbines have gone up to 14-15 MW with 8 MW also pretty common.
• Plain bearings have replaced taper roller bearings at the lower gearbox stage — but management stated taper roller bearings at the carrier stage "cannot be replaced, as per the current technology available"; larger 5-6 MW gearboxes will need bigger, larger taper roller bearings.
• GGB Bharuch machines installed but not yet capitalized or running — the company is currently winning orders and supplying imported GGB product, with a future combination of imported GGB product plus locally produced output at Bharuch; GGB revenue quantified by the CFO at close to Rs.70-75 crores (period unspecified), with Bharuch's GGB investment for FRC and metal polymer combined at Rs.35 crores + Rs.35 crores = Rs.70 crores and expected asset turns of 1.5-2x (period unspecified); the investment is approved and undergoing.
• Gen 3/Gen 4 alternate materials flagged as a future technology intervention opportunity — Timken's GGB is heavily investing in research globally; management acknowledged some listed competitors and wind OEMs are making plain bearings/cages in-house, positioning GGB's alternate-material technology as a differentiated future opportunity.

Fairly Positive Setup; Execution the Key

• Domestic demand seen as robust — management cited India GDP growth at 7% in FY 2026-2027 and infrastructure build-out in full swing; steel production was a little down in Q2 FY 2026-2027, but the overall domestic demand outlook for the coming years is seen as good.
• Global backdrop mixed — management characterized the US market as "in a nice spot," citing US GDP at ~2% (with a huge base) and ASEAN GDP growth at ~4% in FY 2026-2027, while flagging geopolitics as unpredictable; domestic demand was called the "king maker," and the "bad days of exports" are seen as slowly getting over.
• Most attractive markets in the months and years to come — rail "for sure," heavy truck across the board, and off-highway, which is behaving well both globally and in India.
• India cost competitive versus European/global manufacturing — CMD Sanjay Koul affirmed "short answer, yes" but declined to quantify the advantage; management emphasized that for global export business, capability, cost, and delivery must be evaluated together, and on that combined basis India "scores over many countries."
• Setup entering Q3 FY 2026-2027 characterized as fairly positive — with execution remaining the key; external environment includes geopolitics influencing global industry activity, trade-related uncertainties, and ongoing supply chain realignments.
• Amalgamation of Timken GGB Technology Private Limited with Timken India Limited progressing smoothly — regulatory process underway, aimed at synergies, efficiencies, and simplifying the overall structure; next earnings call to cover Q3 FY 2026-2027.