Thank you. Good morning and welcome everyone to Schaeffler India Limited's earnings conference call for the second quarter and half year ended 30th June 2026.

Today, we have with us from the management, our Managing Director and CEO, Mr. Harsha Kadam, and our Director Finance and Chief Financial Officer, Ms.

Hardevi Vazirani. Mr.

Kadam will first take us through a short presentation on the results, and after which, we will open the floor for questions. Thank you, and I now hand over to Mr.

Kadam. Please.

Yeah.

Hi, good morning. Good morning to all the investors.

A warm welcome to this earnings call.

Good morning and warm welcome to our second quarter and six months closing call.

Okay. Let me start by taking you through the presentation.

I hope you already have it open. I would like to move to slide number three.

As always, I would love to start with the customers and the recognitions that we receive from the customers. Quarter two has been a very strong performance and recognitions coming from the customers' side as well.

As you can see on the slide, we have had many an award being given by the customers, starting with on the industrial side from Voith Turbo. We also had from Sandvik Mining, as well, on the industrial side, recognizing us for focused development and cost reduction activities that we carried out.

We have had quite a few coming from the automotive space as well and our esteemed automotive customers, award given by John Deere, then Toyota Kirloskar as well, and appreciation awards coming from Denso India as well. Not to mention the Escorts Kubota as special category award that has been given for our long association as well.

Apart from this, the corporate social responsibility work that we carry out consistently with sheer commitment, and we were awarded for our community development projects that we indulged in, and some of the work that our team has done in developing the tribal areas has been recognized by the CSR convention, and an award was given to that effect as well. What is also important and prestigious is to point out the zero PPM award for quality that we have received from one of the most stringent quality demanding customers, Toyota Kirloskar, and we received the award for a zero PPM, which clearly signifies and underlines the fact that our commitment towards quality, ensuring that our customers get zero-defect product, continues and we stay the course with this.

I would like to now move on to slide number four, and I would cover three parts in my agenda today, starting with the economy and the industry. I would like to throw light on the business performance, Q2, as well as the six months.

Then, a little more on the financial performance for the same period, Q2 and six months. Let me move to slide number five, and what you see on the slide is the economic situation in the country.

Drawing your attention to the bar chart on which shows the GDP, while the first quarter, Q1 calendar year, that is Jan to March, registered a 7.8% GDP growth, the quarter two estimates are hovering around 6.5% to 7%. The official numbers are still to come in.

It appears there's been a marked slowdown, obviously with all the geopolitical situations that are redefining the business rules, even in India. I will come to that in my subsequent slides.

Then talk about the Index of Industrial Production has managed to show a better performance over the preceding quarter, and it continues, the manufacturing output is definitely there, is continuing. The capex demand as well has improved in the last two quarters.

Automotive production too has continued to register a strong double-digit growth rate compared to the previous year. However, Q2 being a financial year start for many of the auto OEMs, you would see it always starts off on a low-key note, and it tends to pick up.

Marginal growth or even a small drop you could see over the preceding quarter, but yet a strong performance when compared to year-on-year. A point of concern that has started to emerge is on the inflation.

The Consumer Price Index, as you can see, has started to creep up. For the last six quarters, when you look at it, the first four quarters showed a very good trend, and then it has started to go up rapidly.

Currently, the Q2 estimates are showing 3.9%, obviously with all the input costs going up in the manufacturing sector, plus the food prices going up, it's clearly reflecting in the commodity prices that have gone up as well. I move to slide number six on the core industrial sector performance, and what you see there is a very strong performance for the last six months, Jan to May, five months I would say, and with cement production month-after-month much, much better than the preceding months, as you can see, same period last year.

Surely, the infrastructure drive by the Government of India is clearly pointing to the fact that the core sectors relevant to the infrastructure growth have been demonstrating a pretty strong growth, cement, the same you would see in the steel sector as well, and growing at 6% over the last year. Talk about coal production, now this is where you'll see a shift happening, clearly in line with the carbon neutrality and the use of renewable energy directives.

You would see the coal production come down over the last two months consistently, whereas the electricity generation still is on the positive side, which means clearly the shift is more towards the renewable energy sectors. On this backdrop on the industrial sector, the positive notes on which the economy and the industry is performing, I would like to now move to slide throwing some light on the automotive sector.

Now what you see on the slide is the two- and three-wheeler production numbers. As I said earlier, the manufacturing industry and the manufacturing sector output is really doing well, and that is clearly evident in every each of the segments that you see here.

The two- and three-wheelers, as you can see, has also registered a very strong growth. Even compared to the preceding months has started to do well, except the passenger vehicles where we did have a drop, straight drop of almost 8% drop that we have seen in the month of June over the month of May.

However, compared to the last year, a very strong growth there again, which I already said about 15%, 15.7%. Talking about the commercial vehicles, again, month of June has been pretty strong, and compared to the last year, obviously it's a big jump, but over the preceding month of May as well, strong performance there from the commercial sector in terms of the production numbers that is there.

Tractors again is demonstrating a good direction. However, this is something that now we have to monitor closely due to the not-so-good performance of the monsoon is what we are hearing.

I guess the monsoon can always be delayed, and we'll have to wait and watch how this pans out and how this is going to impact our business. A lot rides for us on the tractor business as well.

That said, let me now move on to the business highlights. I draw your attention to slide number nine, wherein I'm going to talk about the quarter two performance.

As you can see, the revenue generation in the quarter was ₹2,681 crores, which is a clear 17.5% higher performance compared to last year. Over the preceding quarter, Q1 '26, was a 7% higher performance.

This is in spite of the fact we have had challenges with the automotive sector production numbers, particularly in the passenger vehicles where there was a drop in Q2 production numbers. Also with all the geopolitical volatility that still exists and with the input costs that have gone up as well, we have been able to post reasonably very good performance, I must say, in a challenging quarter.

This has come in spite of the drop in the passenger vehicle production numbers. We have been able to still arrest any adverse impact from the passenger vehicle segment, one because of all the new business wins, which I will come to in a while, but also of sustained effort in trying to maximize the capacity in our plants through business increases with our existing customers and the new projects which were also realizing the business as such.

We have seen a good growth in our vehicle lifetime solutions. Obviously, this is because of some of the capacity advantages we were able to leverage there, and our exports business did pretty well as well.

Industrial business on the other hand, well, it registered a single-digit growth and is still on a positive traction there. Now that said, when you look at the earnings quality, we were able to deliver ₹513 crores at EBITDA level in the quarter, and that's clearly a 19% better performance than last year and the preceding quarter as well, resulting in a profit after tax of ₹336 or ₹337 crores, which is about 12.6% profit after tax.

We also did register reasonably good free cash flow. Obviously, this has been a little lower.

There are attributable reasons to it, our input costs going up, our inventories have gone up, particularly this is a strategic step that we have taken to shore up inventories in some of our business sectors, and hence that has impacted the free cash flow. Also to point out is some of the adverse situations that we faced with the LPG and the oil prices going up, our input costs have gone up, which is yet to be compensated by the customers, which we are still in discussions with them.

Add to that, some freight cost increases which have impacted the bottom line here and some of the IT costs that came in in the quarter as such. Overall, our capex also remains on track.

We'll continue to invest appropriately as needed in line with our strategic growth direction. Inventories is something which is clearly we're watching, and whatever inventory levels we have built up is clearly a planned inventory level in line with the evolving geopolitical situation, and the market demand in the country.

That said, I move to slide number 10, and as usual, I always love to talk about the new business wins because this is what keeps us going and sustains our growth momentum. Every business vertical that we operate in has brought in quite a lot of new businesses.

On the automotive space, some of the new business wins, again, the demand for the double clutch in the tractor segment, more and more adoption of double clutches is being now used by the tractor segment and we have been benefiting from it. The other one is the business win for the overrunning alternator pulley, which actually brings in the compactness in terms of the package that you deliver to the customer and the overall package of the entire system as well.

We have been consistently working on that, and the business win's been secured here with some of our prestigious customers. On the vehicle lifetime solutions, we have started to increase our market coverage.

One step that we took is to, after a gap of two years, we've revived the use of the REPXPERT vans, which is going to travel across the country covering close to 8,000 km to be in very close contact with the mechanics and to upskill them in terms of training, in terms of fitment of solutions, and also to educate them on the upgraded technologies that we are adding on to existing offerings in the marketplace. There are very focused campaigns and workshop engagements that are being done through the REPXPERT, and our portfolio of expansion, particularly in the INA product portfolio, is something we are focusing on and we have started to bring more products from the INA range into the market for the aftermarket.

Bearings and Industrial Solutions has been a stellar performance in the quarter in terms of new business acquisitions. We have secured a lot of business opportunities and wins already in the quarter, particularly in the product portfolio of cylindrical roller bearings, DGBBs, spherical rollers as well, even TRBs for that matter, and some of the plain bearings for the raw material sector as well, variety of applications.

I think one of the largest business acquisitions, highest value, has happened in the industrial space in the quarter, second quarter. I move to now slide number 12, which talks about the earnings quality and the financial performance.

Talking about the revenue from operations, as you can see, in the second quarter, ₹2,681 crores came into the system through the revenue route, which is a clear 7% better performance on growth on the preceding quarter of Q1 and a 17.5% compared to the same period last year. Now that said, where did this come from?

As you can see from the table below, the Automotive Technologies brought in 33% growth compared to year-on-year, Vehicle Lifetime Solutions at 9.9%, Bearings and Industrial grew by about 5% on an average over the year, and our exports business grew 24%. Over the preceding quarter as well, while the Vehicle Lifetime Solutions and our exports grew double-digit, the other two, automotive as well as Bearings and Industrial Solutions, also grew, albeit single-digit at 3.6% and 6.5% respectively.

With this, the demography of our sales mix, 35% of our revenue comes from the Automotive Technologies, and here the Automotive Technologies includes the e-mobility part of the business. The Bearings and Industrial Solutions brings in about 35%, and the rest is split between Vehicle Lifetime Solutions, 12%, and our exports, which is at about 17%.

All in all, a strong performance in the second quarter with all the challenges that we had, primarily on the supply chain side and on the input cost side, we have been able to demonstrate a consistent, strong performance. With that, I move to slide number 13, which talks about the earnings quality, and what you see here is the EBITDA numbers.

₹513 crores coming into the system at 19.1% EBITDA, which is a clear 6.3% increase over the preceding quarter and a 14.3% better performance than the year-on-year. Now to just look at the split, where did this come from?

The gross margin improvement brought in about ₹147 crores. We did have some cost on the employee cost with the new labor codes coming in as well, the wage codes that have been implemented now, and some of the other income expenses.

Net has been a strong performance at the EBITDA level, resulting into a better profit after tax at ₹337 crores as against ₹320 crores last year. Overall, the earnings quality definitely could have been better.

We did get impacted on the foreign exchange FX route as well, input cost route, and both these have impacted to a certain extent our bottom-line performance. Nevertheless, we still have done reasonably good compared to last year.

I move to slide number 14 and talk about the working capital. As you can see, in the quarter two, our working capital has gone up to ₹2,029 crores.

Clearly, this is a planned activity that we have lined up as we are building up inventories in some of the specific sectors for some of our specific customer accounts. This is a planned activity, and we have a clear plan of how to manage this going forward as well.

Capex on the other hand remains more or less the same level. We continue to invest in expanding our manufacturing capacities, which we believe is clearly needed if we have to sustain this growth momentum in the country and continue to deliver a double-digit growth ratio.

Free cash flow certainly is under focus, and we have work to do here as well. Clearly, this is one of the impact is coming because of the increased working capital and the reduction in the earnings, which we believe in the second half of the year, we are going to recover the lost ground going forward.

I move to slide number 15 and talk a little bit on the key performance indicators, a snapshot. As you can see, at a six months level, our revenue growth is about 18% compared to the last year.

As you can see with an EBITDA margin of 19.1% in the quarter, resulting in a six months EBITDA of 19.2% and EBIT margin of 15.8% 8%, and the profit after tax too continues to remain at the same state of 12.6%, 12.7% at a six-month period as well. All in all, top-line growth, yes, we have managed to increase that.

Bottom line, we have held our ground very strongly here in spite of the challenging situation in terms of input cost and some of the foreign exchange increases that we have incurred. With that, I move to slide number 16, wherein I want to throw light on the KRSV Innovative Auto Solutions, a wholly owned subsidiary of Schaeffler India Limited.

Now here again, KRSV or Koovers, as we call it, registered a revenue growth of ₹79 crores in the quarter. In EBITDA, still we are in the negative here as the focus is on scaling up the operations.

While we have registered with a revenue growth of ₹79 crores, exactly delivering as per the committed plan that we have made, we still have some work to do on the bottom line, on the EBITDA and EBIT side. That's something we are addressing it as I am speaking now.

Overall, at a consolidated Schaeffler India Limited, both entities put together, the revenue generation has been ₹2,760 crores with an EBITDA of 18.5% and an EBIT of 15.2%. I move to now the last slide, slide number 17.

Overall, has been a pretty good quarter in terms of our business performance in spite of all the challenges that we are facing on the geopolitical side, on the supply chain side, on the input cost side. Year-on-year double-digit growth is something we have been delivering consistently, and we were able to sustain that coming out of the automotive, vehicle lifetime solutions, and our exports business.

Marginal impact, as I already said, input cost increases as well as freight cost increases and also the FX impact have three impacted marginally our bottom line, but again, it's a decimal point drop, but then we have managed to hold that as well. Working capital, yes, we are monitoring it, and this whatever I talked about on the working capital is something that we had planned, that we need this to keep servicing our customer needs.

That is something we will recover soon. The capex spend stays on track and that is always there.

Yes, more challenges are visible on the horizon. We've closely monitored the situation and we are trying to be more agile and trying to handle situations in a more proactive manner.

Our commitment to deliver value to all our stakeholders continues to remain, and well, I come to the end of my presentation. That's it.

Thank you.

Thank you very much for the opportunity. Sir, my first question is on our industrial segment.

This has recovered well after the dip in the last quarter, but still the growth is very soft at about 5% YoY. My question is, is the portfolio recalibration now complete?

Roughly how much revenue did we consciously let go? When does BIS return to the double-digit growth?

Thank you, Harshil, and let me talk about the strong performance in the sector. As you saw, the core infrastructure sectors contributing to the infrastructure growth, they've all done well, and rightfully, we have grown ahead of the market growth there.

Our own raw material sector has performed pretty strongly there. If one were to look at quarter-on-quarter or even year-on-year basis, we've done well in our power transmission sectors as such.

Yes, there has been a impact from the wind energy, one from a timing perspective and a few from our contracting process which is ongoing. We do have a small impact that has come in, which is something we expect we should recover going forward as well.

If you look at industrial, one of the areas where definitely we are increasing our focus is to look at the distribution side, the aftermarket business side as well. In the second quarter, we did pretty good in terms of recovering over the preceding quarter, and we are in the right direction to recover.

Our aspiration is to make sure the industrial business too gets to a double-digit growth rate. Yeah?

Of course, it has its own set of challenges in some of the sectors, and we will continue to keep the watch and see how do we get this to also up to a double-digit growth rate.

Understood. Sir, my second question is on the exports where there has been an outperformance versus our own guidance.

In the first half, we have grown about 28% YoY. This is well above your CY26 guidance of about 10% to 12% growth, which itself you had raised from 5% to 10% that you had guided during the fourth quarter.

What is sustaining this momentum? Is this more of intercompany allocation?

Is there China+1 being seen within the Schaeffler Group? Are there new geographical mandates?

Some gains could have come from the rupee depreciation. How much of the second half visibility do we have?

Would you like to revise your overall CY26 export guidance further? Just small follow-up to this, has there been any change in the geography mix between Europe, US, South-East Asia, and China for us?

Thank you for your question on exports. Yes, it is mainly because of intercompany allocations.

What is happening is that in the process of localization, many capacities are being built up here in India, and mainly in Savli. Group is trying to leverage on the capacities which are available in India, which we are developing for local market, but there are always opportunities if there is capacity available to serve the intercompany locations worldwide.

Fortunately, the demand from all the regions, Europe, Asia Pacific, China, it has been in the double-digit range, which is leading to the growth that we have reported. Also, we have to consider that FX is also in our favor.

It's probably not so much for Europe because there we have rupee billing, but in other regions like Americas, Asia Pacific, Greater China, we have USD billing, we are to some extent also benefited from that. We will be careful in future guidance due to the ongoing geopolitical disruptions.

While all-round efforts will be done to sustain this level of momentum close to 15-20% growth, but you never know. We have faced this once in 2023, we are treading very carefully, but from our side, we want to maintain this.

Order book is solid for the year, very likely we'll maintain it.

Also Hardevi, a good point to add here is we never gave a guidance for growth. We would always wish to contain the exports to about 20%.

Yeah.

There could be in one quarter a surge in orders. That's what

it is. Share of business we want to maintain.

Nothing to do with the growth. It is to do with what is our cap we would like to put at 20% max exports.

It's good to have a good balance between domestic and export. That's what we had said.

To also have a natural hedging against our imports.

Exactly.

Which is currently working really very well.

Yes.

Understood, ma'am. Thank you very much for answering my questions, and all the very best.

Thank you.

Congratulations, sir, on the strong results and the zero PPM awards. Firstly, on the aftermarket side, generally for auto components, aftermarket is a stable business and most peers grow at high single digits in this space.

Schaeffler has done particularly well with more than 20% growth minimum growth of 20% last 3 years. Q2, the growth has come down to 9.9%, 10%.

Considering that revenue has reached a large size, how do you see this particular segment performing? Would you say the growth will be stable going forward or because of your efforts in terms of increasing the product portfolio, can the growth reach to higher levels?

Thank you, Raghunandhan, for that question. Yes, your observation is exactly our observation, too.

We are well aware of the fact that we definitely can do much more. What we are seeing is some capacity constraints that we have, which is something that is currently being addressed as I speak.

We are trying to bring in more capacities so that we can feed both the OEM requirements and the aftermarket requirements. Invariably in a high-growth situation, the OEMs end up getting the priority and the VLS kind of takes the second preference, and that is something we do not want.

We want to definitely prioritize, and we are addressing the capacity gap that we have in meeting the entire VLS demand. That is something work in progress right now.

Here again, just to add, it's not just about Schaeffler capacity. We have work cut out in terms of our own supply chain capacities as well.

A lot of local suppliers are still under development, but I am sure we will get them all to a closure so that we continue to ensure the entire supply chain is now aligned with the increased demand situation, both on the OEM side and on the VLS side.

Understood, sir. Thank you.

On the cost side, trying to understand that many of the auto component and other suppliers have been facing pressures on commodity side and the pass-through happens with some lag. Trying to understand how are you managing that situation.

Also, on the minimum wage hike which you spoke about, are you seeing the OEMs responding positively? Do you expect a compensation to be given in the coming quarter?

Again continuing the point on the cost side, other expenses in the opening remarks, you referred to increase in the freight cost and IT cost increases. This elevated level of other expenses, has it been one-off or should this level continue?

First I will touch upon the other expenses that you mentioned. Other expenses have marginally increased.

In quarter two of last year, we were at 15.1% of other expenses. Currently, we are at 15.4%, there is 0.3% increase.

This 0.3% increase is covering fuel price increases, which we all witnessed. In Q1, it was only single month March, whereas Q2 is full quarter impact of the fuel prices, which is within other expenses category.

Second thing is Harsha talked about the capacity constraint at our Hosur plant, which is leading to impact on VLS business because we are prioritizing OEM. This capacity constraint is leading to the air freight of incoming material as well as outgoing material.

While all-round efforts are being made that volumes are absorbing these level of unforeseen cost, it is very unlikely that the customer will reimburse this. Customer would expect that we are doing some productivity measures, VAVE, etc., to absorb such kind of cost.

On wage increase, we have seen average of wage increase of 10%. Again, this is not subject to the recovery from the customer.

What is recoverable from the customer is indexation of FX, which we are working on currently and very likely in second half of the year, we will see some traction on price correction. Other is on steel price indexation.

Other than that, the customers usually expect that the company will implement productivity measures to absorb the increases.

Thank you, ma'am. This was very helpful.

I'll fall back to the queue.

Yes, hello. Good morning, and thank you for the opportunity.

My first question is going back to the pricing part of it. We've seen our gross margins expand this quarter QoQ.

What I want to understand is how does the pricing work across your different segments? One is say intercompany on exports, how does that work with commodity costs and forex?

Say with OEMs and with the aftermarket, I am assuming aftermarket price hikes would be easier. If you could kind of just give how the pricing work across these end markets.

Mukesh, thank you for the question, and let me start the other way round, that is with the automotive OEMs. As automotive industry works on indexation mechanism, and not all commodities are put under that list.

There was an earlier question on the labor wage code increases. Surely, that's not on the list.

To get compensated from the customers is not easy at all. Yes, we are in dialogue with most of the OEMs.

We already been talking to them, particularly on the input cost increases due to LPG, propane, that have gone up because of the situation there in West Asia. That is something that is in discussion, and these commodities are not in the list, indexation list.

Definitely the dialogue is going on. We will see what we can achieve.

As Hardevi rightly said, in the second half of this year, we expect some positive action to come there. We will stay the course there.

Overall on the automotive side, this is our position. Now regarding your question on pricing between the segments, I am afraid that is something I cannot really because that would be So what I mean is, No,

what I mean is how does the pass-through work across these segments? For exports with the parent, is there every quarter kind of a reset with respect to how forex is moving and raw material costs are moving?

Or is that annual? Just to get some sense on this quarter, gross margins have gone up, just trying to understand, what are the different variables in this margins.

When we talk about the intercompany exports, it is at arm's length pricing principles. Transfer prices are determined, and true-up is done at the end of the year, in December.

This is general methodology, which is followed by every company and it is as per the OECD guidelines.

Sure, so that's understand that part of it. Just coming back to the industrial business, I think this is something that you've got many questions about.

When I look at the non-auto non-mobility side of it, the Bearings and Industrial segment within the non-mobility business, it's remained at this ₹400-crore kind of a number now for last six to eight quarters. Could you give some sense if our market shares have however remained stable in this period?

It's only an end-market kind of an issue, sometimes it could be railways, sometimes it could be aftermarket, but market shares overall, have they kind of remained stable in this segment? Secondly, in your opening remarks, you had mentioned about some large order wins in terms of value in this industrial segment.

If you could give some more color on that, if that would kind of change the trajectory on this number.

Mukesh, just to get a clarification, your question was towards the non-mobility sector, is it?

Yes, non-mobility.

Other than Koovers and rails.

Okay. As I've already mentioned, one of the core industrial sectors, the raw material sector, which is the core metal industries and continuous process industries that we cater to, whether it is steel, aluminum, cement, we have seen strong traction in the quarter, correct?

Obviously, just because of the growth in the infrastructure sector, that's already happening. We have seen pretty good traction there.

We've been doing well. We've been localizing a lot of parts to cater to this sector.

There, we are well on track and it's working well. Industrial automation as a sector, yes, we're doing good.

Can we do better? Definitely.

That is something we are looking at what new product portfolios that we have to add to get into this sector. The power transmission sector, we are pretty strong there.

We are doing very well there as well. Good growth in the second quarter, close to 8% growth there as well.

Overall, when you look at the non-mobility sectors and purely the OEM side, certainly we have done well. We're doing well there.

Maybe the distribution side of the business is something we feel more opportunities there, and that is clearly on our radar to exploit and move forward there more. In fact,

I would just say that on industrial non-mobility side, we have grown double-digit.

Yes, yeah. If you look at it purely, double-digit growth overall in the non-mobility side.

The automotive side of the bearing business is a little under pressure, yes.

Right, right. I was just looking at the non-export also, obviously the industrial non-mobility includes exports which has grown really well.

I do get your point here. We look forward to some more improvement there.

Thanks a lot for this. I'll get back in the queue.

Sir, my questions have been answered. Thank you so much.

Thank you.

Hi sir. Thank you for the opportunity.

Sir, again so my questions were also on the industrial segment. Could you just help us understand which segments have performed or improved over the last quarter and how do you see the other segments which are underperforming to kind of ramp up and help us grow in the double digits?

Thanks, Himanshu, for the question. I already said that we had a strong traction in the second quarter over the first quarter.

If you were to look at the numbers, we did have a strong growth in the core metal industrial sectors, and which is the crux of the industrial sector. That is where we saw good growth.

We are also seeing good growth in the power transmission sector. There are a few sectors where there has been a lag.

This has nothing to do with us, it's more to do with railways, for example, is more tender-based working, there we have not seen any much of a growth yet in the quarter over the preceding quarter. Yeah?

Wind energy, I did already talk about it. Yes, we are going through some contract negotiations with some of our customers there, and these are global contracts that we get into.

Wind energy has seen a dip in terms of revenue in the second quarter for us. However, that is a matter of time when that's going to be resolved as well.

Okay. Thank you, sir.

Just on the order wins, you mentioned that the Bearings and Industrial Solutions got the highest order wins, and also I can see that in the automotive sector, which is currently not doing so well. When do you see this automotive also coming into the growth trajectory and that should ideally help you grow in the double digits?

A good question. Automotive has been one of the challenges, yes, and you are right in pointing out that we have seen a very sluggish growth there for a couple of reasons.

One is the automotive bearing business is more commoditized, we carefully choose where we are in competitive and we are working towards our strength there and we are playing the game. Hence, from a top-line growth perspective, you may see moderated numbers.

However, the focus is also to secure the bottom line, which is super important for us, and so it is a very prudent and a conscious effort that we make on the automotive side. However, clearly we are trying to address through cost competitiveness, how do we get more cost competitive, can we localize the products more, is something else that we're looking at.

We are looking at primarily these two options. Once we address them, yes, we will be able to get back in strongly in the game in the automotive bearings business as well.

Thank you so much, sir.

Hi sir, good morning. My first question was on the KRSV Koovers side.

Broadly quarter-on-quarter, the revenue was ₹79-80 CR, but the EBITDA margin worsened from 13.4 to 17.3%. Why was that?

When is breakeven on EBITDA and cash flow expected?

Sorry, did you talk about Koovers standalone, or you are talking about consolidated financials?

No, I was talking about standalone Koovers.

Koovers, there are two special things in Q2. We have introduced accounting policy of sales cut-off, the numbers that you see on the top line are after adjusting the revenue recognition of ₹5.6 crores, which is impacting EBITDA, as well as we have started making the provision for founders' bonus, which is to be paid next year in the month of May for 3 years, which is leading to this level of margin change.

It is approximately ₹3 crores impact.

Okay. By when do you expect this to breakeven on EBITDA and cash flow level?

In

2029.

2029? Okay.

Got it. Secondly, on the automotive business, we have seen very strong run rate in the first two quarters, 31%, 33%.

What is driving this strong rate? Is it because of e-axle or what?

Is it sustainable in the second half also?

On margin side, we have been maintaining this level of margins for several quarters, right?

No, Automotive Technologies' revenue growth rate was very high, I was asking on that. Okay.

Automotive Technologies' overall growth rate if we see year-on-year quarter is 33.3%. Within that, both the conventional business has grown by close to 20%, and the remaining growth is coming from e-mobility.

Yes, there is a timing difference for e-mobility, but also conventional ICE engine business is also increased close to 20%. Also,

I think it is good to point out that if you look at the Q2 production numbers of passenger vehicles, it was down 8% over the preceding quarter, 8%, whereas our business, we have not dropped 8%. We have actually improved our market share as well.

We've grown our business there.

We grew by 3.6%. We grew by 3.6% as against market dropping at

-8%. That's an important pointer as well.

This is more driven by market share gains rather than underlying vehicle volumes or higher content per vehicle. Mostly, it's market share gains.

Am I reading it right?

Absolutely.

Yes. Just last one from my side.

Our

capex for CY26 was pegged at ₹400 to ₹500 CR, and I think we have done 175. That would put close to ₹250-300 CR in the second half, will that be there?

Also, can you tell us the breakup of capex between maintenance, automotive, industrial bearing localization, and the Shoolagiri plant?

Yes, in the remaining period, we are expecting that we will be consuming the remaining of ₹500 crores. Accordingly, the orders have been placed for the machinery for capacity and localization.

The breakup is that close to ₹120 crores is in auto ₹170 crores is in Automotive Technologies and remaining in B&IS.

How much is the annual maintenance capex?

Sustaining is very small. It's very small, maybe 10% of capex.

Okay. Got it.

That's all from my side. Thank you, and all the best.

Thank you.

Thank you.

Thank you everyone for joining us today. If you have any further questions, please do reach out to me at [email protected].

Thank you, and wishing you a good day.