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Centrum Report
Schaeffler India Ltd. Q3 CY24 print was in-line with our estimates; Revenue/Ebitda/Adjusted profit after tax grew 12.1%/9.8%/5.2%, driven by 13% growth in bearing and industrial segment and 11% growth in automotive technology revenue. Management said operating performance in Q3 was driven by,
Continued strong performance across power-transmission, railways, wind & raw-material segments,
11% growth in automotive technology, and
Aftermarket segment growing 7% YoY.
Though it was partially offset by 15% QoQ decline reported in export revenues due to softer demand in European markets. New Order inflow for double clutch systems for Commercial Vehicle, HD valve bridge and Clutches Private vehicle and SRB, CRB for industrial segment continued during the quarter.
With higher other expenses/employee cost +18%/+21%, Ebitda margins stood at 18.1% (-39 bp), while Profit after tax margin declined to 11.9% (- 79 basis points). We reckon sustained momentum led by,
resilient demand for Bearings and industrial segments,
better margin outlook over on account of localization and backward integration, and
new business wins.
We expect localisation and strengthening supply chain, the company may improve operating margin. We tweak our estimates and maintain Reduce rating with revised target price of Rs 3, 866 (implying 50 times H1 CY26E earning per share).
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