Schaeffler India - Progressively Improving Localisation: Yes Securities

Yes Securities Report

Post our Schaeffler India Ltd. Savli plant visit (Vadodara, Gujarat) which manufactures bearings for Industrial (wind, paper, steel, cement, off-highway) and automotive two wheeler applications. We believe the Savli plant will play a pivotal role towards achieving Schaeffler India growth targets of -

• A gradual increase in localisation to ~80% (versus ~75% currently and ~69% in 2018) and

• higher exports out of India (both to meet Schaeffler global requirements and standalone exports).

Our conviction stems from the fact that Savli is Schaeffler India sole plant manufacturing bearings for wind turbines.

Schaeffler India intends to gradually expand its product universe, from bearing (guide motion) to auto/industrial supplies (generate motion/transmit motion) to motion technology (e-motors/drives).

Led by new business wins and localisation, the Schaeffler content per vehicle is likely to move up from the current ~euro 35-40/ vehicle in due course.

Although recovery in exports remains the key catalyst for mid-term stock performance, valuations at 42.2 times/36.7 times CY23/24 bloom standalone earning per share partially reflect key positives.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.