SKF India Limited filed its Business Responsibility and Sustainability Report (BRSR) for the financial year ended March 31, 2026. The filing, submitted to the stock exchanges, outlines the company's environmental, social, and governance (ESG) performance and forms part of the Annual Report 2025-26. The report discloses that the company has obtained reasonable assurance for the nine core BRSR attributes from TÜV SÜD South Asia Pvt Ltd.

The company reported that its Scope 2 emissions for FY26 were zero, reflecting a transition to 100% renewable electricity procurement through International Renewable Energy Certificates (I-RECs) and Power Purchase Agreements (PPAs). Total Scope 1 emissions stood at 240.02 MtCO2e, down from 667 MtCO2e in the previous year. The reduction is attributed to the demerger of SKF (Industrial) India Limited effective October 17, 2025, and the company's renewable energy transition. Total energy consumed from renewable sources was 145,100.68 Gigajoules (GJ).

Environmental Performance

SKF India reported a total waste generation of 5,285.84 metric tonnes for FY26. Of this, 3,138.45 metric tonnes were recycled. The company achieved zero liquid discharge by treating wastewater through Effluent Treatment Plants (ETPs) and Sewage Treatment Plants (STPs) for reuse in gardening and landscaping. Total water withdrawal was 167,478.6 kilolitres, with water intensity per rupee of turnover recorded at 7.86.

Social and Governance Metrics

The company reported a workforce of 1,891 individuals, comprising 615 employees and 1,276 workers. The gender diversity among employees was 20.49% female, while workers had 12.93% female representation. The board of directors included one female member out of six, representing 16.67%. The company recorded zero complaints regarding sexual harassment, child labour, and forced labour during the year.

Gross wages paid to females constituted 8.98% of total wages. The company spent 0.07% of its revenue on employee well-being measures. SKF India confirmed that 100% of employees and workers were paid wages above the minimum wage threshold. The turnover rate for permanent employees was 6.90%, while for permanent workers it was 5.00%.

Assurance and Compliance

The BRSR report was verified by TÜV SÜD South Asia Pvt Ltd, which provided a reasonable level of assurance for the nine core attributes. The verification covered indicators such as greenhouse gas footprint, water footprint, energy footprint, waste management, employee wellbeing, gender diversity, and data security. The company stated it is compliant with applicable environmental laws, including the Water Act, Air Act, and Environment Protection Act.

SKF reported an adjusted operating margin of 13.9% for the second quarter of 2026, an improvement from 13.3% in the same period last year, driven by solid commercial execution and strengthened profitability in Specialized Industrial Solutions (SIS). Net sales for Q2 2026 reached MSEK 23,195, representing organic growth of 1.4%, while the adjusted operating profit rose to MSEK 3,223. The company noted that growth in the industrial segments offset negative market demand in the Automotive business.

Financial Performance

The company's net profit for Q2 2026 stood at MSEK 1,329, a significant increase from MSEK 583 in Q2 2025. Basic earnings per share increased to 2.77 from 1.13 in the prior year. For the half-year period, net sales were MSEK 45,068 compared to MSEK 47,132 in the previous year, with an adjusted operating margin of 13.7%.

Operational Highlights

Rickard Gustafson, President and CEO, attributed the margin improvement to strong performance in SIS, particularly in Aerospace and Magnetic Solutions. Although the Automotive segment faced continued weakness, growth in China remained strong. Savings from rightsizing activities of approximately MSEK 350 offset separation-related negative synergies. The company also largely compensated for tariff-related costs during the quarter.

Strategic Developments

SKF is progressing the separation of its Automotive business, which now operates as a standalone entity within the Group. The company remains on track for a planned listing in Q4 2026, subject to board and shareholder approval. Concurrently, SKF is strengthening its industrial business through a humanoids partnership with Leaderdrive and a modernization of its IT landscape to support AI capabilities.

Outlook

For Q3 2026, SKF expects organic sales to strengthen somewhat year-over-year, citing signs of improved market demand in certain industries during Q2. However, the company cautioned that geopolitical turmoil amplifies overall unpredictability. Guidance for the full year 2026 includes a tax level of around 29% and additions to property, plant, and equipment of around BSEK 4.