Schaeffler India , a leading industrial and automotive component manufacturer, has announced ambitious plans to invest INR 4,500 crore over the next five years until 2030. This strategic move aims to bolster the company's manufacturing capabilities and increase its localization efforts in the country.

Localization Drive and Capacity Expansion

Schaeffler India has already made significant strides in its localization journey, investing INR 1,700 crore over the past three years. This investment has yielded impressive results, with the company achieving a localization ratio of 79%, up from 74% previously. This means that 79% of Schaeffler India's sales now come from products manufactured in its Indian plants.

Hardevi Vazirani, Director of Finance and CFO at Schaeffler India, emphasized the positive impact of localization on the company's performance: "Due to localization, the EBITDA margin has gone up. Within those investments, we have backward integration, land and buildings, a lot of margin improvement projects and relevant investments."

Capital Expenditure Plans

For the current year, Schaeffler India has earmarked a capital expenditure of INR 400.00 crore, with similar amounts planned for the following year. This forms part of the larger INR 4,500.00 crore investment plan announced by the group CEO for the period up to 2030.

Product Portfolio and E-mobility Focus

Schaeffler India's product portfolio currently comprises 60% bearings and 40% non-bearings. While the non-bearing segment has achieved a localization ratio of nearly 90%, the company sees further opportunities to improve localization in the bearings segment.

In the rapidly evolving e-mobility sector, Schaeffler India has secured a significant business win with Tata Motors for the supply of e-axles for the Tata Harrier EV. The company is implementing a phased localization strategy for this technology, with plans to increase local content gradually.

Harsha Kadam, Managing Director and CEO of Schaeffler India, explained the company's approach to e-mobility: "We very well have it in our strategy to localize going forward. We have already started to localize some part of the production process. The phase two of the localization is underway and hopefully by mid next year, we are going to now bring in the parts to start the assembly of the e-axle."

Research and Development Capabilities

Schaeffler India has significantly enhanced its R&D capabilities, particularly in the e-mobility space, following the integration of Vitesco operations. The company now operates with 910 engineers at its Bangalore R&D center, focusing on developing solutions for both global and Indian markets.

Export Performance and Future Outlook

The company's export revenues peaked at INR 1,100.00 crore in 2022, with the current mix standing at 50% to Europe, 10% to the USA, and 40% to Asia. While export growth is expected to moderate, Schaeffler India anticipates increased demand from Southeast Asian countries and Korea.

Wind and Railway Segments

In the wind energy sector, Schaeffler India is preparing for the shift towards higher capacity turbines, beyond 4 megawatts. The company is strategically gearing up to manufacture larger diameter bearings for these applications.

For the railway segment, Schaeffler is well-positioned to cater to the Indian Railways' focus on safety, reliability, and comfort. The company is particularly strong in supplying components for electric locomotives and is prepared to meet the demand for higher-performance products in passenger locomotives.

As Schaeffler India continues to invest in localization and expand its product portfolio, the company is well-positioned to capitalize on the growing opportunities in both the automotive and industrial sectors in India.

Schaeffler India Ltd., a prominent player in the automotive and industrial components sector, recently conducted a significant block trade on the National Stock Exchange (NSE). The transaction, which took place at a price of Rs. 3,833.80 per share, involved approximately 144,118 shares of the company.

Transaction Details

The block trade, executed on the NSE, amounted to a total value of Rs. 55.25 crores. This substantial transaction highlights the continued interest in Schaeffler India's shares among institutional investors and large market participants.

Market Implications

Block trades of this magnitude often indicate strategic moves by large shareholders or institutional investors. While the specific parties involved in this transaction have not been disclosed, such trades can sometimes signal shifts in investor sentiment or portfolio rebalancing by major stakeholders.

About Schaeffler India

Schaeffler India Ltd. is a well-established name in the automotive and industrial sectors, known for its high-quality bearings, components, and systems. The company's products are crucial in various applications across automotive, industrial, and aerospace segments.

Conclusion

This block trade, valued at Rs. 55.25 crores, underscores the liquidity and market interest in Schaeffler India's shares. As always, investors are advised to conduct their own research and consider their financial goals when making investment decisions.