SKF India (Industrial) Limited has filed the transcript of its Analyst and Institutional Investor Meeting held on May 13, 2026. The meeting was conducted to discuss the financial results for the quarter and year ended March 31, 2026. The disclosure was submitted in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations.

Financial Performance

The company reported a solid sales growth of 9.8% quarter-on-quarter, reaching INR 9.5 billion. This performance was primarily driven by significant growth in the OEM segment, specifically in wind, metals, and rail sectors. Sales to wind customers surged 91.0% quarter-on-quarter, driven by orders from ZF and Suzlon. The metals segment also saw strong deliveries to Tata Steel and SAIL, while rail sales grew by 12.0%.

Profitability metrics showed substantial improvement. The company reported a 1,731 basis points increase in Profit Before Tax (PBT) to 9.5% for the quarter. However, this figure includes one-time demerger-related expenses of INR 183 million incurred during the quarter. Excluding these one-time costs, the adjusted PBT margin stood at 11.5%, compared to 13.1% in the previous quarter. The margin decline was attributed to a shift in product mix towards lower-margin OEM sales and higher employee costs due to bonus accruals.

Operational Highlights

Operational efficiency improved as net working capital was reduced by 2.8% quarter-on-quarter, representing 18.7% of sales. This reduction was largely driven by a 16.9% decrease in inventory levels relative to sales. The company also noted a significant jump in cash flow, aided by working capital reduction and tax adjustments.

Strategic Outlook

Management outlined its 'ACES' strategy, focusing on Accelerating Localization, Commercial Excellence, Disciplined Execution, and Working as One SKF. The company plans to invest around INR 800 crores over the next four to five years, including a significant chunk for a new Pune plant expected to be commissioned by the end of 2028. Near-term margin guidance anticipates a return to approximately 13% as demerger costs normalize, with a long-term target of 15% by FY29-30.

SKF India (Industrial) Limited reported a 9.8% quarter-on-quarter (QoQ) increase in revenue from operations to INR 9,457.2 million for the fourth quarter ended March 31, 2026. The Board of Directors approved the unaudited financial results for the quarter and the audited annual results for the fiscal year at a meeting held on May 12, 2026. The statutory auditors, M/s. Deloitte Haskins & Sells LLP, issued unmodified review and audit opinions on the financial results for the quarter and year ended March 31, 2026, respectively.

Q4 FY26 and Full-Year Financial Performance

For the full year ended March 31, 2026, revenue from operations stood at INR 34,403.6 million. The company reported a net profit of INR 1,189.7 million for Q4 FY26, compared to a loss of INR 500.9 million in the preceding quarter. For the full year, the net profit was INR 2,176.7 million. The following table summarises the key financial metrics:

Management Commentary

Mukund Vasudevan, MD, SKF India (Industrial) Limited and President – India, Southeast Asia and Middle East, commented on the results: "We had a strong close to FY 2025-26. In the second full quarter as an independent, and focussed industrial entity, SKF India (Industrial) delivered robust sales growth of 9.8% (QoQ). Building on the foundation laid post-demerger, we are seeing sustained momentum across key sectors, including wind, railways and metals. Our underlying performance was anchored in sharp customer focus, operational excellence and execution discipline. With India's manufacturing and infrastructure growth setting pace, we are well-positioned to leverage this growth cycle, drawing on our strengths in advanced engineering capabilities, localisation, and customer-centric solutions. Our focus remains steadfast on solving evolving business needs and enabling customers to do more with less." The company is embedding sustainability, precision manufacturing, and digital capabilities across its operations to support sectors integral to India's economic growth and Southeast Asia's evolving industrial needs.

Operational Highlights and Margins

The company achieved solid net sales growth with margins improving QoQ. Profit before tax (PBT) for Q4 FY26 was INR 899.7 million, a significant improvement from the loss of INR 671.4 million in Q3 FY26, which was impacted by exceptional items of INR 1,800.8 million. The PBT margin for Q4 FY26 stood at 9.5%. The growth was driven by a 20.1% QoQ increase in OEM sales and a 25.7% rise in inter-company sales to SKF India. Net working capital (NWC) improved significantly, declining to 18.7% of net sales in Q4 FY26 from 21.5% in the previous quarter. Consequently, net cash flow from operations improved to INR 2,370 million in Q4 FY26 from a negative INR 238 million in Q3 FY26.

Balance Sheet Highlights

As at March 31, 2026, total assets stood at INR 26,745.0 million, up from INR 19,147.3 million as at March 31, 2025. Total equity increased to INR 14,768.5 million from INR 13,110.4 million. Cash and cash equivalents at year-end were INR 5,691.7 million, compared to INR 4,531.4 million at the start of the year. The following table presents key balance sheet items:

Cash Flow Statement

For the year ended March 31, 2026, net cash flow from operating activities before exceptional items was INR 3,599.4 million. After accounting for exceptional items of INR 1,961.0 million, net cash flow from operating activities was INR 1,638.4 million. The following table summarises the cash flow position:

Dividend Declaration

The Board of Directors has recommended a final dividend of INR 10 per equity share (face value INR 10 each) for the financial year ended March 31, 2026, subject to shareholder approval at the forthcoming 2nd Annual General Meeting (AGM). If approved, the total dividend payout will amount to INR 494.4 million. The record date for determining eligible shareholders has been fixed as Friday, July 3, 2026, and the dividend will be paid on or before Friday, September 11, 2026.

Exceptional Items and Demerger Background

During the year ended March 31, 2026, the company recognised exceptional items aggregating INR 1,961.0 million. These included demerger-related expenses for IT costs, professional services, and stamp duty of INR 286.9 million, along with an estimated transfer premium payable to statutory authorities for land registration of INR 1,639.2 million. Additionally, the company recognised an incremental financial impact of INR 34.9 million as a statutory impact of new Labour Codes, primarily arising from a change in wage definition related to gratuity, presented as an exceptional item for the quarter ended December 31, 2025 and year ended March 31, 2026.

SKF India (Industrial) Limited was incorporated on December 17, 2024, as the resulting entity under a Scheme of Arrangement involving the demerger of the Industrial Undertaking from SKF India Limited. The National Company Law Tribunal (NCLT), Mumbai Bench, approved the Scheme on September 26, 2025, with the appointed and effective date fixed as October 1, 2025. Pursuant to the Scheme, the company allotted 49,437,963 fully paid-up equity shares of face value INR 10 each to shareholders of SKF India Limited in a 1:1 share exchange ratio, and the equity shares were listed on BSE and NSE on December 5, 2025.

Tax-Related Disclosures

SKF India Limited entered into a Bilateral Advance Pricing Agreement (BAPA) with the Central Board of Direct Taxes (CBDT) in respect of financial years from FY 2012-13 to FY 2020-21. As the financial years covered under the BAPA precede the effective date of the demerger, the company recognised INR 49.9 million towards its share of secondary adjustments during the quarter and year ended March 31, 2026. Additionally, during the current quarter, the company adjusted tax expenses aggregating INR 556.6 million on profits for the period from April 1, 2025 to September 30, 2025, being the tax on profits prior to the appointed and effective date of demerger in accordance with the scheme of arrangement approved by NCLT.

About SKF

Since 1907, SKF has been making bearings, seals, lubrication systems, condition monitoring solutions, and services aimed at reducing friction. The company is represented in approximately 130 countries and has around 17,000 distributor locations worldwide. Annual sales in 2025 were SEK 91,583 million and the number of employees was 37,271.