Schaeffler India grows revenue, but costs edge ahead and margins slip YoY
Standalone operating margin improved sequentially, while other income remained a notable contributor to pre-tax profit.
Filed 10 Aug 2026, 18:40 IST · after market close · Schaeffler India Ltd (SCHAEFFLER)
Key takeaways
- Standalone revenue grew 17.50% year on year, but expenses grew faster at 17.74%, trimming operating margin by 0.17 percentage points.
- Operating margin recovered 0.03 percentage points sequentially to 18.71%, ending a decline from the 19.78% recorded in Q2FY26.
- Other income contributed 8.68% of pre-tax profit, while the 0.69-percentage-point sequential rise in the tax rate limited profit conversion.
Price around the results
Revenue momentum returned in Q1FY27
Schaeffler India’s standalone revenue rose 17.50% year on year and 6.96% sequentially, with operating profit growing 16.44% year on year and 7.13% sequentially. The business retained a margin of 18.71%, 5.41 percentage points above the 13.30% median for 137 Consumer Discretionary peers that had reported the quarter.
Costs contained sequentially, but not against last year
Sequentially, expenses grew 6.92%, slightly below the 6.96% revenue increase, widening operating margin by 0.03 percentage points. Year on year, expenses grew faster than revenue—17.74% versus 17.50%—which narrowed margin by 0.17 percentage points. Interest expense also rose 37.50% year on year and 20.88% sequentially, although it remained small relative to operating profit.
Margin direction is stable after Q2FY26 peak
Operating margin moved from 19.78% in Q2FY26 to 18.50% in Q3FY26, then recovered to 18.68% in Q4FY26 and 18.71% in Q1FY27. This marks a sequential recovery rather than another decline, but the margin remains below the Q2FY26 peak. Other income accounted for 8.68% of pre-tax profit, so reported profit included a meaningful non-operating contribution; the tax rate was broadly unchanged year on year at a 0.02-percentage-point increase but rose 0.69 percentage points sequentially.
Management keeps capex framework on track
Management said the company’s capex framework remains on track and reiterated its commitment to delivering results and creating long-term stakeholder value. The presentation also said free cash flow was affected by higher working capital and reduced earnings. It cited estimated GDP growth of about 6.6%, alongside global uncertainty and subpar monsoon risks, as part of the wider operating environment.
The market reaction was down, against the stock’s usual pattern
The stock fell 2.52% on the reaction day and was down 3.79% after five sessions, with a 1.36 times volume ratio on day zero. That direction was unusual relative to the four-result history, in which the stock rose after three results and fell after one; the median absolute move was 4.67%, making the five-session decline smaller than its typical reaction.
Q1FY27 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,681 cr | ₹2,507 cr | +6.96% | +17.50% |
| Other income | ₹39 cr | ₹45 cr | -12.97% | -12.71% |
| Expenses | ₹2,180 cr | ₹2,039 cr | +6.92% | +17.74% |
| Operating profit | ₹502 cr | ₹468 cr | +7.13% | +16.44% |
| Operating margin (%) | 18.71% | 18.68% | — | — |
| Interest | ₹1 cr | ₹1 cr | +20.88% | +37.50% |
| Depreciation | ₹87 cr | ₹87 cr | +0.65% | +13.31% |
| Profit before tax | ₹453 cr | ₹426 cr | +6.30% | +13.70% |
| Tax | ₹116 cr | ₹106 cr | +9.24% | +13.80% |
| Net profit | ₹337 cr | ₹320 cr | +5.32% | +13.67% |
| EPS (₹) | ₹21.50 | ₹20.50 | +4.88% | +13.16% |
Operating margin of 18.71% compares with a Consumer Discretionary sector median of 13.30% across 137 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -2.52% | -2.00% |
| Next session | -2.18% | — |
| 5 sessions | -3.79% | -5.13% |
Volume on the results session was 1.36× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company states that its capex framework remains on track.
- The company is committed to delivering results and driving long-term stakeholder value.
Expansion
- The company’s capex framework is on track.
Problems & risks
- Free cash flow was impacted by increased working capital and reduced earnings.
- GDP growth is estimated at about 6.6%, with a slowdown amid global uncertainty and subpar monsoon risks.
What to watch
- Whether standalone operating margin holds above 18.71% after the sequential recovery.
- Whether expense growth remains below revenue growth after running 17.74% versus 17.50% year on year.
- Whether other income stays below or rises above its 8.68% share of pre-tax profit.