Schaeffler India Ltd (NSE: SCHAEFFLER) Q4 2025 Earnings Call dated Apr. 30, 2025
Corporate Participants:
Unidentified Speaker
Gauri Kanikar — INVESTOR RELATIONS
Harsha Kadam — CHIEF EXECUTIVE OFFICER
Hardevi Vazirani — Chief Financial Officer
Analysts:
Unidentified Participant
Somil Majithia — Analyst
Mukesh Saraf — Analyst
Ankur Sharma — Analyst
Harshit Patel — Analyst
Sonal Gupta — Analyst
Samayik Jain — Analyst
Presentation:
operator
It. Ladies and gentlemen, you have been connected to the Shafra India Limited conference call. Please stay connected, the call will begin shortly. Ladies and gentlemen, you have been connected to the Shafla India Limited conference call. Please stay connected, the call will begin shortly. Thank you ladies and gentlemen, Good day and welcome to the Q1 CY25 earnings conference call of Schaafla India Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star then zero on your touchstone phone.
I now hand the conference over to Ms. Gauri Khankar. Thank you. And over to you ma’am.
Gauri Kanikar — INVESTOR RELATIONS
Good morning everyone and welcome to Shuffler India Limited’s earnings conference call for the first quarter ended 31st March 2020. We have with us from the management today Mr. Harsha Kadam, our Managing Director and Chief executive officer and Ms. Harvey Vazirani, our director, finance and chief financial officer. Mr. Kadam will first take us through a short presentation on the results after which we will open the floor for questions. With this I hand over to Mr. Kadam now. Thank you.
Harsha Kadam — CHIEF EXECUTIVE OFFICER
Thank you Babi. Good morning and a very warm welcome to the investing community. So let me start by taking you through the brief presentation for the quarter one performance of Sheffler India Limited for the year 2025.
I am on slide number two. I would like to start by sharing with you how our clear focus on customer centricity is yielding good results. And as you can see, the testimony of the focus that we have brought in in the last quarter and the. Well, in terms of improving our collaboration and partnership with our customers and whether it is improving our localization content and increasing our footprint both on the manufacturing side as well as on the logistics side or with respect to expanding our product families to eight in all, which magnifies the extent of offering that we are able to offer to our customers as well as of strong belief in our values of innovation and the passion with which we deliver.
The testimony is in the awards that we have that we see on the slide. Whether it’s in the area of quality of the product and quality of the service, whether it’s in the long term partnerships that we engage with the customers in or is it with respect to the safety record within our plants also, not to mention some of the new product development engagements that we very actively pursue without of course underlying the fact that the underlying reason and focus on sustainability continues to be the base on which we do our business. On this note, a very positive note, I would also like to share with you that we recently got our customer service calls and I’m very proud and happy to share that our rating has improved to 8.62 from the previous survey which was at 8.41 and that too adds credibility to the efforts that we are making towards our customers.
That said, let me move on to some of the economy and the industry highlights. As you all know now, the India growth story has been moderated to around 6.5%. Well comparatively this still is a strong growth number looking at what’s happening in the macroeconomical situation around us. That said, the inflation was one of the moderations the last quarter when I talked about and there appears to be some moderation on the consumer price index as well with the RBI stepping in and more corrective measures being implemented there. So we believe that the inflation as such in the country would be tried to be kept under control as we move forward so as to stimulate growth and consumption within the country.
Talking a little bit about the automotive production. In the first quarter the automotive production posted a strong growth with 6.2% compared to the previous quarter. As you can see, the trend is definitely on the upside. Now if one were to look at even the index of industrial production, it continues to over around the same levels as in the preceding quarter of Q4. The overall growth in the manufacturing sector, particularly the basic material sector which grew by about 6.5%. And then you had of course the other transportation and equipment sector which grew in double digits at 13.5%.
All in all, even the mining sector grew by about 3.5% overall, raising the manufacturing growth to about 4% in the quarter. So to say with this it is clearly obvious that while there are still challenges, particularly with all the geopolitical developments that we have, India still remains to be a bright spot in the growth story of the economy around the world. Now that said, we definitely are focused on putting our actions in place as to how do we leverage this strong position that we are fortunate to be in India and operating at this kind of a growth level.
I move to the next slide which throws light on some of the core industrial sectors and what you see here is as you can see, the cement production which kind of weighs down about 5.5%, weighs on the GDP and that grew by 12.3%. Clearly riding on the back of the focus by the government of India on the infrastructure development and steel Production grew around 6.5% while coal production, considering the focus heavy on the renewable energy side, coal production is still at a moderate 3%. Power production in the country around 4% now. All in all, when you look at the industrial sector, the renewable energy sector is certainly doing well because we have seen the bounce back in the renewable energy equipment manufacturers and that has also helped us in big way.
As we move into the numbers, I would like to talk about moving on to my next slide on the automotive sector performance. The two and three wheelers grew by 6% as you can see and have been stronger growth compared month on month compared to the previous year as well. We definitely saw bright spots even in the passenger vehicle demand going up. As you see, the production numbers went up and the passenger vehicles in the first quarter of the year grew by 5.3% and so did the commercial vehicles which was low have started to inject. Although in the month of March it did post lower numbers.
But Jan and felt were strong months and it grew by about a percentage point. Cactus on the other hand, as shown a strong uptick again incidentally, on the forecast of reasonably good monsoons, we are seeing the demand strongly bouncing back and the tractor production went up 19% in the country and this too is helping our business performance in India. As such, I now would like to move on to the business highlights for the quarter Q1 2025. But before I get into the details, I move into the slide which talks about the revenue from operations which we have restructured a bit.
I want to right up front say that while it doesn’t impact or change the total, it is just a rejigging of the numbers between the business verticals that we operate in. Now. Why have we done that? It’s fundamentally because of operational efficiencies and also to manage the operations in a much smoother way that we have restructured some part of the business. The first one is the one way clutch business. The product one way clutch which we manufacture was initially in the industrial part of the business, but predominantly it goes into the automotive applications. So we have transferred that to the powertrain and chassis part of our business vertical.
On the other hand, also the second change that we brought in is the OEM which is the spare parts business with our OEM customers was with the OEM part of the vertical which we have now moved to Vehicle Lifetime Solutions which is our pure aftermarket business in the automotive space. So rightfully this rejigging of the numbers within the verticals is helping us to bring a lot more focus, bring in better review mechanisms so that and better accountability in the operational performance as well. And accordingly the segmental disclosures have been now reinstated in the four verticals that we are operating in now.
On that, let me now move to the next slide and throw some light on the Q1 performance. So has been a pretty good quarter performance for us in terms of top line growth. As you can see we posted 2110crores in the quarter revenue coming in which was a clear 1.3% better than the so pardon me, there’s a correction that is there 1.3% with respect to the preceding quarter Q4 24 and 14.1% with respect to the first quarter of 2024. That said, you know this has resulted in a strong EBITDA as you can see 19.3% and I guess this is the highest EBITDA that we have registered so far, bringing in an EBITDA of 407 crores into the system.
And this has been a further improvement from the 18.8% EBITDA that we registered in the last quarter of last year. This resulted in a profit after tax of 12.6% in the quarter which is definitely much better than the preceding quarter which was at 12% thereby raising the cost after tax to 265 crores. Now if one were to look at it obviously the growth momentum continued because we had a very favorable mix in terms of the business and the revenues that we do. We were also careful in terms of managing our capex spending. So hence you will see that our free cash flow also registered a strong numbers at 237 crores compared to the preceding quarter which was 163 crores.
And of course it was negative in the first quarter of last year. And clearly the prudent focus on working capital management as well as the capex spending has helped us to manage and deliver a strong free cash flow number for the quarter. With that I would like to move to the next slide to talk about a little bit on the business development area and business wins that we have been focusing upon. So the automotive technology we have continued to win new businesses in the clutch systems product as a product portfolio, particularly in the commercial vehicle segment and the heavy duty commercial vehicles as well.
So we have had significant win. In fact a number of wins in the quarter that have come in, some of which have already started to flow into series production, has enabled us to continue to sustain the growth in the automotive space. Talking of the vehicle lifetime solutions, while we had already launched some of the white labeled products like the wipers for the car, the lubricants, the engine oils and the brake fluid oils for the automotive application. Coupled that with the true forever grease that we had already launched. We also did launch the steering kit for the automotive application and what we have seen is the sales begin to pick up there.
We did have some issues in terms of product quality and packaging which we have addressed. And finally we are starting to register a sale of almost one and a half crore registered in the first quarter itself. Moving on to the industrial side of the business which is predominantly bearings and lifetime solutions, I must say that we have one some significant wins in our lifetime solutions area as well. Engaging into collaboration with our customers to offer the lifetime solutions as a part of their service offering in many of the food and beverage industry sectors which they operate in.
That said, we have also won a lot of businesses in the bearings as well as the ball bearing and some in the two wheelers which are very interesting applications like linear ball bearings which is a new product line that we have now offered to a customer in the two wheeler segment. So our journey in terms of securing the business wins which helps us to sustain and keep the pipeline running to enable a continued growth story continues and we will continue to share with you more such wins in the future as well. As we come to the next quarter, I move to the next slide which is throwing some light on the financial performance.
And let me draw your attention first to the revenue. I did talk about it that our sales revenue 21,10 crore was definitely over the preceding quarter 1.3% better. But over the last year, year on year was 14.1% that revenue came from. If you were to look down at the revenue bridge, the automotive technology space brought in about 83.6 crores into the system. WLS delivered 26 crores and the industrial bringing in about 92 crores. And of course the large growth did come in the export business which we see a bounce back and strong upticks coming from our export business.
We have also managed to start the deliveries and our business into the E mobility space. The numbers are still small but we will start to share with you as the number of startups came up in the succeeding quarter as such. So fundamentally looking at the growth, if one were to look at the business verticals and how did they do compared to the preceding quarter? Automotive technologies grew by 6.9% and the vehicle lifetime solutions there was a small dip compared to the preceding quarter. As you all know, the last quarter of the year, calendar year is always the Strong numbers that the vehicle lifetime solution boasts and the bearings in industry and solution we saw a lower number at 7%.
This coming on the back of the demand from the distribution side of the business which we had pushed in in the last quarter which saw weak startup in this quarter. However, some of the core sectors like the wind energy and the raw material sectors and the two wheelers have performed very strongly for us there as well. Star performer in the business has been the exports in this quarter which grew up 20% over the preceding quarter and it won to compare it with year on year quarter also grew up 23.2%. So a few quarters back we were having apprehensions on the exports business as it had bottomed out.
And now I think we are on the upswing again here. And what has this done to our sales mix? And as you can see our portfolio still continues to keep a reasonably good balance with 40% of the sales revenue coming from the industrial and bearing side, the automotive OEM side of the business coming in with 33%. The vehicle lifetime which is our aftermarket business in the automotive space coming in at 12%. And then of course our export which was down to around 1112% has gone up to 15% in this quarter. With that I move to the next slide on the financial performance.
And I did already mention that 407 crores came in as the EBITDA and with a clear year on year, 20.2% growth over the preceding quarter. As you can see it was 18.3 a 1 percentage point improvement in the EBITDA over the preceding quarter. And if one were to look at the bridge of the ebitda, where did this come from? Clearly the maximum contribution of 115 crores out of the 407 did come in obviously at the gross margin improvement which is attributed to higher sales and the mix of the verticals. Of course we did have some pulldowns in terms of some marginal employee cost improvements and some other expenses that we have reported.
But overall I must say a strong EBITDA performance for the quarter. This has resulted in a profit after tax of 265.4 crores in the quarter with a PAT of 12.6% compared to 12.3 over the preceding quarter. I mean over the last quarter of last year. I move on to the next slide which is the working capital. And as you can see, while the working capital in terms of fails certainly has shown a marginal improvement, however we still have some weight on the numbers that we have delivered. If you look at the Q1 of last year our working capital was much lower and we have now kind of gone up there and we still have to bring in a lot more focus here.
This is going to be a focus area for us and our target and our actions are to try and get it down to last year’s level. Talking about capex in the last quarter results call also I did mention that we have been judicious with our capex. We have invested quite a lot in the preceding quarters and the preceding years but looking at the moderation in the demand and the slowdown, marginal slowdown in the economic growth, we have moderated our investments and as you can see for the quarter we had just invested 82.5 crores which is almost at half the level compared to the same period last year.
So here we committed and stand committed to invest in the right product portfolio at the right time as the markets begin to come up as well and we will continue our long term plan in terms of our capex investment skin holds and state. However, these small corrections and moderations along the way needs to be done to ensure us to deliver the better financial results. As such I did talk about the strong free cash flow because of our working capital management as well as the capex judicious improvement investments that we have made resulting in a strong free cash flow which came in at 237 crores for the quarter which was definitely much higher when compared to the Q1 of 2024 as you can see here.
With that I move to the performance indicator slide and I draw your attention to the EBIT margin and clearly between the EBITDA and the EBIT what you see there is a gap obviously our focus is now on to improve the capacity utilization in the capacities that we have already invested and this is important for us to ensure that the CapEx what we are putting we start to leverage. We will continue to keep the focus on that at the same time manage our cost management measures that we have been countermeasures that we have which we stay focused upon now that said, the revenue growth I did already touch upon we have a strong revenue growth compared to the last year at 14% and better EBITDA margin coming in at 19.3% and also we have been able to sustain the ebit margin at 15.5% yes, resulting in a profit after tax of 12.6% and strong cash flow as well.
With optimizing our CAPEX spending in the quarter I move to the next slide wherein I want to throw some light on the split between The Shackler India Limited Q1 standalone results and our E commerce platform KRSV Innovative Water solutions for the Q1. So I’ve already talked about the Shackler India Limited standalone results. I would like to talk throw light on the krsv. So as you can see, KRSV Innovative auto Solutions Project Limited 2 in the first quarter has delivered a strong performance in by bringing in a revenue of 64.6 crores in the quarter which is clearly an improvement over the preceding quarter.
And the EBITDA definitely still is in the negative region. And while we are now expanding our footprint across India and India exactly in line with the plan that we have laid out, our focus is also on improving the efficiency for each of the locations that we have started operating in. We have seen the order inflows increasing. We have also seen the stickiness of the customers wherein the customer once he places an order comes back and we are seeing a positive response when it comes to the stickiness part because that’s an indicator that we have repeat customers coming back and we are in line with the numbers that we are wanting to deliver.
We do have some pressures on the margin right now, but we hope that we clearly are onto it. We want to deliver the numbers when it comes to krsv. While we already have the top line coming in line with the plan we have laid for ourselves, we have to do a little more work on the EBIT margins here to make sure that we come back in line with the plan. So at a consolidated level, Shafler India, both the companies put together, our revenue stands at 2,174 crores with an EBITDA of 18.3% which is a dip of 1 percentage point because of the impact of KRSV and also that is dreadfully impacting the EBIT bringing it down to 14.5% at a consolidated level resulting in earnings before tax of 15.7%.
With that I come to my last slide which is the summary slide and yes, we continued our focus has already to try and deliver a double digit growth year on year which we have continued to sustain for the fourth succeeding quarter delivering a double digit growth rate. Quality of earnings certainly has improved due to the volume growth and the mix as well as well as the efficiencies within our operations. We have also seen that we have been able to leverage more our manufacturing footprint and locally produced as a percentage of stage two has gone up in the quarter and we will continue to keep this focus and sustain this.
This has resulted obviously in a strong also our working Capital management and the CapEx spend optimization as result Link also improved financial management that we have put in has also brought in the good results that you see for the quarter and certainly all our focus remains in running our operations efficiently so that we continue to deliver similar results in the succeeding quarters as we stand committed clearly in line with our vision of being a motion technology company to our customers. With that I come to the end of my presentations. Over to you, Gabby. Thank you.
We can open the floor for questions, please.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your Touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and two participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Somil from Kotak. Please go ahead.
Somil Majithia
Yeah, hi, thanks for the opportunity sir. Two questions from my side. First on exports. Now we’ve seen a very strong recovery in exports both on a YOY as well as on a Q on Q basis. Could you give us some more details as to any particular geographies which have done better and within the businesses, any particular segments which have done better and how sustainable is the trend? You know, how is the order book looking from a next 2 to 4 quarters perspective? That’s my first question.
Hardevi Vazirani
Swamil hi, this is Harvey, the cfo. Thank you for your question. So the export business increase is mainly attributed to Asia Pacific. As we have said in past few calls that we are finding new geographies and within Asia Pacific, Southeast Asia, Japan, Korea, we are focusing on those markets as well. So it is mainly coming from Asia Pacific as well as some new countries in Europe. So both EU and AP Asia Pacific have contributed to the increase year on year as well as over Q4. Talking about the product groups, as we have said in the past also that the main business is for industrial bearings which continues to be the same.
So it is mainly for industrial bearings.
Hardevi Vazirani
Sure.
Hardevi Vazirani
So the traditional erstwhile geographies and exports there we haven’t still seen a sustained recovery. Would that be a fair statement and if yes, is that an optionality where if recovery plays out in those segments, the export traction can be far longer.
Harsha Kadam
So the other geographies where we have been playing are continuing. It is kind of a flat yes. If further recovery happens, that is a geopolitical situation improves, we expect better results. As of now, the order book is for the short Term we are very cautiously looking at the developments that are happening around the world, but we expect to sustain this level of performance.
Gauri Kanikar
Sure.
Hardevi Vazirani
And my second and last question in terms of the India markets, while we had seen some sort of slowdown on the industry segments, are you seeing kind of recovery or government spending or private capex spending going up and to that extent which will help our industry portfolio? That’s my last question. Thank you.
Harsha Kadam
Yes, Soumil, we definitely have seen some uptick in our business and demand at least particularly if you see the renewable energy sector wherein we play a big role in the wind energy market. We saw pretty strong demand coming in in the first quarter as well, particularly in line with the gearbox manufacturers who cater to the wind equipment manufacturers. We have seen a strong uptick. We did definitely also see some strong uptick in the off road sector, construction equipments definitely. We have seen clearly this is riding on back of the infrastructure focus by the government. So we have seen that as well, doing very well.
And not to mention of course we are also seeing some on the raw material sector, good improvement even over the preceding quarter. We have seen good project executions that have started to happen within the core industrial sectors. So these three I would say definitely have shown. But there were others related sectors like power transmission sector which caters to either the raw material or even to the other industrial sector. Yes, that too definitely saw an uptick. We have seen almost a six point percentage growth. Sorry. Yeah, growth there as well. So all in all there are sectors within the industrial we have seen and we also seen that we have gained some good businesses in the industrial space, particularly in the wind I talked about already and in the raw material.
Hardevi Vazirani
Sure, thank you. And all the best for subsequent quarters.
Harsha Kadam
Thank you.
operator
Thank you. The next question is from the line of Mukesh Sadaf from Avendus Park. Please go ahead.
Mukesh Saraf
Yes sir. Good morning and thank you for the opportunity. My first question is on the I think you’re eligible to E mobility business that has started for you this quarter. So is this the e accle order that we had spoken about a year or so ago and so has that started now? And if you could just kind of remind us, I think you had mentioned at that time 300 million euro order over a period of a few years. So does that stay the same in terms of quantum.
Harsha Kadam
Okay, Mukesh, thanks for the question. And yes, we have started off series production and supplies for the. As you all know, the delay was because the customer was. They deferred the launch of the product which finally has Happened and we have start to see now movement of the equipment that we offer to them, which is the key aspect rightfully going forward. We now are optimistic about the market response as well as the demand picking up. So hopefully our wish is that we also catch up with the first quarter numbers which came in being lesser than what we had anticipated.
But then we expect that going forward it should further improve and make up for the drop that we had in the first quarter. Okay, okay.
Mukesh Saraf
But the quantum of the order remains 300 million euros.
Harsha Kadam
That’s over a lifetime of. Yeah, over the lifetime. Yeah, yeah, that.
Mukesh Saraf
All right, thank you. And secondly is with respect to the new business wins, seeing railway segment within your industrial essentially DGB, DTRV and CRVs in the railway segment. So is this the freight side of it or this continues to be more on the passenger railway side.
Harsha Kadam
Our presence is reasonably good in the passenger wagons and the local is. We are very strong in the metro trains. Freight is an area that we still some distance to go.
Hardevi Vazirani
Okay.
Harsha Kadam
So primarily numbers that you see is on the passenger wagons, metro and the local markets. Got it.
Mukesh Saraf
And just lastly more at the group level. We are reading a lot about job cuts that the group is planning to do in Europe. Especially after the Vitesco merger. Things are probably slower in terms of synergies. Could this have some kind of impact here? I mean it could be positive as well. But any kind of change in thought process with respect to how the group is going to be using the India subsidiary, especially now with more focus on costs at the group level.
Harsha Kadam
Let me answer it this way now. What’s happening in the remains and I’m happy to share that in India so far we have not seen any impacts due to what is happening in Europe coming in. As you can see our numbers are proving it that we continue to deliver the double digit growth. That’s because the market share is different. The situation here is very different. Correct. So it is important that we keep the focus on the business and the market and ensure that we deliver the value that we stand committed to. Correct. And we will continue to keep the of course the cost management prudence in terms of our spending that has been there and we will continue to be there.
Obviously we have to be efficient in our operations and in our operational management which we will continue to keep the focus that in no way dilutes what’s happening there. Right.
Mukesh Saraf
So my question is more with respect to then using our cost base here and probably looking, I mean to India exporting a lot more now given their focus on Costs. So is that a possibility is what I would say.
Harsha Kadam
So so far we have not received those information that are there to be any shifting of lines etc. We have so far and as we stated that we are very prudent when it comes to such strategies. It has to benefit the localization and domestic market first.
Hardevi Vazirani
Got it, Got it. Thank you so much. I’ll get back.
operator
Thank you. The next question is from the line of Uncle Sharma from HDFC Life. Please go ahead.
Ankur Sharma
Yeah, hi, good morning. Thanks for your time. Again on exports and especially given the whole tariff situation on China, just trying to understand have there been any talks of using India as a sourcing hub for exports to the us? Is that something which is a possibility? Is that something that can be potentially something we could see?
Harsha Kadam
I mean on tariff it is. I, I don’t think anybody in the world can comment right now. The situation has been very, very fluid that first announcements and then withdrawing that and also that currently US is in talk actively with China on diluting actually the complete tension. So right now we don’t see that we are changing actually that within Shapler we are changing the stage strategies and bringing India as China plus one. But yes, if such a situation evolves we will see it in numbers.
Hardevi Vazirani
To add to that, you know our exposure to the US market in terms of exports was insignificant in the past and even today it is so. So we do not see much of a risk. However if the situation improves and the need to leverage India cost competitiveness comes up, of course we are ready to do that as well. But again there’s a lot at play here. One of them obviously is the tariffs. So we will wait in the right way and take a call as and when the opportunities open up. We do that.
Ankur Sharma
That’s helpful. Second on the auto side and especially when I look at across passenger vehicles, maybe even two wheelers, outlook for the coming year is more like a low to mid single digit kind of a growth. Is what you understand then specifically for Shackler, you know, you keep these, you could still outgrow the industry, maybe get to that double digit growth. Is that what you would aspire for? And I understand, you know, given your we’ve been seeing very strong growth. But is that something that you believe can continue?
Harsha Kadam
Yeah, you said it right Ankur, that the automotive industry and if you were to take the largest volume today coming from the passenger vehicle segment. Yeah, it is in single digit growth year on year. That is true. But our aspirations still continues to be there that we try and get it to at least a double digit growth or stay ahead of the industry or the segment growth. To that effect, what becomes super important is our offerings. So if one were to look at the large population of the passenger vehicle system with IC engine. Yes. And we have started to localize more and more products in India.
Correct. For these offerings, we continue to believe that there is going to be moderated growth in the IC engines in spite of the hybrid technology or the pure battery electric vehicle technology coming into play. That said, our focus on the IC engines will be there. It will continue to be there. And our investments also continues to be there. But that does not mean that we will not be focusing on the battery electrics of the hybrids. And as we have seen India responding favorably to the hybrid technology, we have also started to bring our products and offer it to our customers in India.
Even from the hybrid technology space, some localizations have already started for the hybrid offerings to our customers in India. More will happen as we go along. And the third being the pure battery electric vehicles I did touch upon. We have the e accle business wins. There are more projects we are working with our customers. Not one but some. And rightfully we are also already started to offer for the battery electric vehicle technology not just the e axles, but even at a component level we have started to get some breakthroughs. So rightfully we one of the companies who are fortunate to have the bandwidth to offer products in each of the portfolios.
And that’s one of the Shafler strength as a motion technology company.
Ankur Sharma
Okay, got that. Thank you all of us.
operator
Thank you. The next question is from the line of Harshit Patel from Equator Securities. Please go ahead.
Harshit Patel
Thank you very much for the opportunity. The first question is. In the past you had indicated that the company was shifting some of the bearing production lines to India, especially from the European countries. Even in the annual report we saw a lot of related party transactions in terms of purchase of tangible assets. So is this whole process over any left for us to do in terms of further enhancing export oriented production capacities over here?
Harsha Kadam
So let me first correct, it is not export oriented. It was mainly for localization. As you are aware that localization as a. As a strategy is a primary thing in our priorities. Schaeffler India Ltd. Total revenue from operations few years back was only 67, 68% from own production and rest was imported. And we were not able to localize because of the volumes that we had yet to gain. As the volumes the demand increases in the domestic market. Instead of importing, exporting, we are Relocating those lines. And we are producing now here and selling in the domestic market.
So it is not that if the intangible assets are moved from Europe or elsewhere to India, it is for exports. It is mainly for localization. And thereby we can see that in last few years our localization ratio has gone up to 70, 76% now. So whatever we are selling, 76% is manufactured in our four plants in India. So it is main now export. If it is resultant of that that some lines which are shifted here also have export days, then we serve those markets as well. But the primary strategy remains localization.
Harshit Patel
Understood, ma’am. Follow up to that.
Harsha Kadam
A few quarters back, a parent company had announced that it intended to move some part of the CLUX production from Sheffield Shield plant in UK to our Hosur plant. So could you comment on this relocation exercise?
Hardevi Vazirani
So as of now, at least I can say that they might have announced, like in the recent past, they also announced that whatever the cuts are taking place, that the beneficiary would be Vietnam, India, China and all. But ultimately, when the strategy is framed, it depends where it is ultimately going.
Harsha Kadam
Also, I think we must take cognizance of the fact that when we want to localize production here of the products, obviously we have to make investments in production machines. And we have the option in front of us to look at brand new machines or look at machines that can be utilized from the older plants lying there. Obviously they would cut lower investment for us. And the wise thing to do rightfully would be to pick up those machines in those plants where they probably are underutilized, and bring them here so that we can optimize our investments as well.
Right. And that I think is a wiser decision. And we remain focused on this options when we make our investment decisions. Sure. So my second question is on the margins.
Harshit Patel
Could you give us a flavor on.
Harsha Kadam
Margin levels of various segments as in.
Harshit Patel
Automotive technologies, vls, bis, as well as exports? Even Baltimore numbers would do.
Harsha Kadam
So if you.
Harshit Patel
Even if you could highlight the descending order among these segments, that will be very helpful.
Harsha Kadam
Unfortunately, as a cfo, I would not do that. Thank you.
Harshit Patel
No problem.
Harsha Kadam
We understand it.
Unidentified Participant
Thank you.
Harshit Patel
Thanks a lot for answering my questions. And all the very best.
Harsha Kadam
Thank you.
operator
The next question is from the line of sef, sort of from ICICI Prudential. Please go ahead.
Unidentified Participant
Thank you for the opportunity. This two parallel questions more connected to the E mobility of Litesco Integration.
Harsha Kadam
Right. So on the test, of course, in India, because you have. They have an Indian entity. Right. So has Shaftar India started to leverage portfolio of the Tesco India C on mechatronics and others and just connected to it to understand if there is a complete system level order. Right. Which you have to get in Shackler Group as part of India. Right. So which uses both Shackler and Mitesco products, how would it typically be divided between the two entities?
Hardevi Vazirani
So thanks Sai for that question. Yes, Vijespur definitely has its footprint here. They have a manufacturing plant and they’ve been doing good business in India. With the global acquisition that has happened, Vitesco in India still remains a different company altogether, although it is under the SHAE umbrella as such within the country. Now that said, are we leveraging when we go to in front of the customer? Of course we are leveraging because what Vitesco brings in is very powerful competence which we did not have on the Shapler side, particularly in the area of electronics, sensor and software capabilities which we have started to leverage so that we can raise the value that we offer to our customers.
Right. However, both of the companies still operate at arm’s length because it’s a different company altogether. Yes. And we are a listed entity so we certainly have a clear arm’s length interaction that happens between the these two companies. But for the customer in front of the customer, both remain as coming from one brand. And so we find we see that both the teams work together to deliver a much higher value proposition to the customer. With our strong mechanical capabilities and their strong electronic and software capabilities combined together, we are able to increase our offering levels whether it’s in the IC engine applications or even in the electric mobility application.
As you know, Vitesco in India is also their predominant business is still in the IC engine offering sensors and electronics that go into the IC engine applications today. But they are also gearing up to get into the electric mobility space they already have business wins in component level. So it’s, it’s definitely, it’s. It’s a complementary situation for us in terms of the strength of Vitesco and the strength of Shackler. Going together in front of the customer.
Unidentified Participant
And just in the systems parts is something like a YAXL order. Right. So that you will take a Shackler India and then you would enter into Armstrong transaction with them or it the entire system order can go to either of the two entities.
Harsha Kadam
Well, those are things that depends on the project, depends on the customer and depends on the supply chain model that we develop. So it doesn’t have to be this way or that way. It all has to be seen the location of the customer who has the capabilities, who has the strength. So that’s how we work upon. But right now I want to reiterate that we are operating at an army distance. Because of that we are two different companies.
Unidentified Participant
Thanks a lot.
operator
Thank you. The next question is from the line of Sonal Gupta from HSBC Asset Management. Please go ahead.
Sonal Gupta
Yeah, hi, good morning and thanks for taking my question. So sir, in your opening remarks you sort of mentioned that you moderated the capex going forward given the slowdown that we’re seeing in demand. So I just, I mean if you could give some more granularity on that. I mean is this mainly because of the slowdown on the global side or the domestic slowdown on the auto side? I mean like if you could give us some color there as to what is. And I mean which segments are sort of turning out weaker than what your original expectations were.
Harsha Kadam
So let me correct here. First of all, capex reduction is not due to the demand as you have seen that we have grown double digit over the same quarter last year. So there is no dearth of demand here. The capex activity has been slowed because in last three years we have invested aggressively close to 1700, 1800 crores. And it is time that we focus on capital efficiency. And our fifth plant in Shulagiri will be up and running in the second half of this year. So these major investments into buildings and infrastructure, et cetera are all done.
So this year there is no more further spend, bigger spend on buildings which we have been doing in Savli Telegram and horses. It is now time to realize the benefits of this capex that done in the past year. So the focus will be on capacity utilization, installation of machinery, etc. And thereby we are saying that compared to last year the investment will be lower, but it is not that the investment is going to be drastically lower and the investment momentum will continue in the, in the coming years as well.
Sonal Gupta
Okay, got it, thanks. The other question I had was like you mentioned on the hybrids as well that we are. So I mean if you could give us some. I know we’ve been talking about the blended content on the PV side and that is obviously growing. I mean we are getting into eaxel space as well and so that is a very high value component. So I mean if you could give us some idea of the content, right? Like ice versus hybrid versus the, I mean ex sort of thing. So on the EV side. So if you could give us some idea on what sort of realistic content values could we see for these and because I think hybrids is a space there, you would probably in the next couple of years see a lot of action.
Harsha Kadam
So. Yeah, thanks for the question, Songal, and. Well, I think you more or less, you kind of know the answers as well because you know, we have been operating, if you were to take the passenger vehicle as a segment, we have been operating with a content per vehicle close to about €50 per vehicle. But now with the hybrid technology coming in, which actually the technology is in addition to the IC engine. Right. So which means obviously the content of vehicle goes up because we continue to cater to the IC engine application, plus we also offer our hybrid solution.
Yeah. So that continues. So obviously there is going to be definitely improvements in our content per vehicle. We have not started to measure that yet. Why? Because the calculation requires us to take the entire vehicle part number to dissect only the hybrids and do it. Something we have not approached it yet. The same applies to the pure battery electric vehicles as well. Wherein obviously if I am offering components to the EV application, my content per vehicle would be lower than what If I were to offer an E axle which is a system level offering, my content would be much, much, much higher.
So rightfully this is just beginning to. Now the sales numbers have started to grow. So hopefully in the succeeding quarters we will be in a better position to talk about what kind of contents we are in each of these segments.
Sonal Gupta
Got it. And just to follow up on that, I mean, are we currently participating with the Japanese OEMs which are already in that market? And do we have like E ACCL as a system level offering? I mean, do we have component offerings mainly on the hybrid side or we do have some more system or subsystem level offerings as well.
Harsha Kadam
We are definitely strongly engaged with the Japanese customers who patronize the hybrid technology. Yeah. And we already have in serious production of some products and components for the hybrid applications in our plant in Mosu. We are already doing it. We are supplying it to them already. So on all the hybrid platforms that you see the Japanese launching, our presence is already there. Yes. And I’m sure as the volumes for hybrid improves and increases, that becomes favorable for us to also take up investments and manufacture locally rather than import and supply some of the critical parts, which we do even today.
Sonal Gupta
Okay, great. Thank you so much for answering.
operator
Thank you. The next question is from the line of Samaic Jain from Marikulis Investment Managers. Please go ahead.
Samayik Jain
Thank you for the opportunity. Just one question. So due to the tariff implications, while the exports are implications, the Implication on exports are yet undecided. What could be the specific like is there a possibility of increased imports from China? So do you think that’s a possibility if the exports on. If the tariffs on exports from China are here to stay for the US or global markets?
Harsha Kadam
I don’t think we replied this before. Also that due to the tariff situation which is very fluid that the group is getting into the China plus one especially thinking about India as an exporter to usa. Our own share within our total exports to USA is not so high. So we are not going to be impacted very adversely. However, if we are talking about in place of China where the group is thinking of India to be exporter, then business strategy is yet to be evolved.
Samayik Jain
Yeah Ma’am, my point is the excess capacity that China has is that close to India. So do you think there’s any implication for us on a sales or margin perspective? I don’t know. The assumption that you’re trying to make when you say some that the capacities in China will flow to India. I don’t see the connection there. Because China shatter in China is also very big and they are operating there. Right. They have their local demand, the local consumption, the local market already which they cater to in a big way. Yeah. So that is totally a different situation for us.
It’s not that the capacities from there would flow into India. India would become competitive and rightfully the China plus one talk is all about that to make India into another hub for manufacturing. Well, as it evolves and unfolds we definitely will are prepared to make more investment if it warrants and to locally produce and also increase the export. But it all boils down to what’s the direction this is going to go.
Harsha Kadam
In the geopolitical interdependency on steel or on other material which are imported by many countries from China is being reviewed at the group level. We have a task force who’s closely monitoring different impacts which can have on Scheffler worldwide. Whether it is about raw material, whether it is about our own finished product, import, export. So this task force is continuously monitoring it. As of now I don’t see that it is still a major concern. That we see.
Samayik Jain
Yeah, got it. Thanks. Thanks a lot for answering.
operator
The next question is from the line of Rakesh Jen from Access amc. Please go ahead.
Unidentified Participant
Yeah, hi, thank you. Just. Just one question on the exports.
Harsha Kadam
I’m sorry to interrupt. Mr. Akisha, your voice is coming low.
Unidentified Participant
Is it better now?
Harsha Kadam
No. Sir, can you speak a bit louder and use the handset? Mr. Rakesh the current participant has been disconnected. We will move on to the next question. It’s from the line of Vimal from Alchemy Capital Management. Please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity. Sir, my question on Capex for this year has just on that given the revised or the number that you’ve just put out for Q1, a lower number, what can we expect for the full year? That’s question number one. The second bookkeeping question was within our segmental breakup for bearings and industrial solutions, what would be the portion purely for automotive. So what is the component for automotive bearings within that. Thank you.
Harsha Kadam
So capex, we have registered close to 80 crores. By end of this year it will be slightly above the run rate. So we will be doing slightly more in the coming quarters as the situation evolves on the capacity utilization and capital efficiency the decisions will be taken but it will be slightly above the current quarter. And if we talk about the segment mix on bearing just minute within that auto bearing is close to 17%.
Unidentified Participant
Understood. And ma’am, what is the outlook on pure industrial bearings? Industrial bearings in India for domestic, given the fact that you know the wind is doing well, railways is expected to do well. So should we see a high teen kind of a growth year for industrial bearings? I’m talking CY26.
Harsha Kadam
From a demand perspective. Obviously you know, if the industrial production in the country is going at the rate of 4, 5%, obviously the demand will be there to that effect. The rest is all about how we want to continue to do better than those numbers which we always strive for and we have been delivering. So obviously this comes with becoming more competitive. Hence what has Devi mentioned about localization? The more we produce the products in India, the more competitive we get, the more market share we gain and thereby obviously the bearings business would grow better than what the industrial index growth in the country is.
That would be my.
Unidentified Participant
Do you feel the general demand environment in terms of the. In terms of the. While of course we can, we can choose to take initiatives internally but do you feel that the demand is resolute at this point in time to give us that to support that high teen sort of a number?
Harsha Kadam
Well, I’m not an economist but all I can say is looking at what our customers are doing and what they want from us, I can vouch that we have seen definitely good demand coming in many of the sectors. I did already talk during my presentation. I talked about the wind coming back very strongly. The demand has been strong. Surely our wind gearbox manufacturers and equipment manufacturers have been exporting well out of India. So we leverage that business. Correct. And so is the need in some of the infrastructure sectors we see or related sectors to the infrastructure industry.
So we are seeing strong traction come by push by the government with more liberalization and more investments coming into the country. Obviously we expect some of the other sectors to open. So there is definitely optimism in that area that yes, we will continue to see more demand coming in because India needs more to grow. And if we are talking about the growth numbers which the government is projecting to get to whatever 7 trillion by the year 2030, obviously investments have to continue to come into India and we also being a part of the ecosystem, we will have to continue to invest.
Unidentified Participant
Thank you so much sir and all the very best.
operator
Thank you. The next question is from the line of Rakesh Jain from Access amc. Please go ahead.
Unidentified Participant
Yeah, thank you for opportunity. Sir. Just want to check on the export side the nature of growth. Could you help us understand if there is something at contributed to the inventory positioning prior to the tariff situation or should we assume that, you know, this is something which is, which would be recurring in nature for us.
Harsha Kadam
Just to. Get a better clarity. You mean to say that the USA has to build more inventory so as to avoid the high tariff and any.
Hardevi Vazirani
Other nation who were supporting the US and prior to that, they would be looking at supplying more right now as the tariffs take effect before that, No.
Somil Majithia
I don’t think that we will be resorting to such measures to increase the inventory specifically knowing that the tariff situation is not the realistic one currently.
Harsha Kadam
Okay, so the revenues which we have recorded, we should think about it as recurring in nature for us or better. Okay, got it.
Unidentified Participant
Thank you.
operator
Thank you. Ladies and gentlemen, due to time constraint, this was the last question for today’s conference call. I would now like to hand the conference over to Ms. Gauri for closing comments.
Gauri Kanikar
Thank you everyone. Thank you for joining us today. If you have any further queries, please do reach out to me or drop me a note@gauri.kanikarchat.com we now conclude the call and wish you a good rest of the day. Thank you.
operator
Thank you. On behalf of Shatula India Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.