SKF India Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript SKF India Ltd filed with BSE on 26 May 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
SKF India reported Q4 FY26 sales growth of 3% quarter-on-quarter to about INR 5.6 billion, while profit before tax fell due to one-off gains in the prior quarter including forex gains, fixed deposit income and reversal of employee cost provisions. Full year FY26 sales grew 12.8% to INR 20.3 billion, while profit before tax margin declined due to mix, discounts and demerger-related comparability issues. Management discussed the ongoing trading arrangement with SKF Industrial, capital expenditure plans of about INR 500 crores between FY26 and FY28, and strategic priorities around electric vehicle bearings, premiumization and margin recovery.
Numbers mentioned
Sales: INR 5.6 billion (Q4 FY26)
p. 4
“As I said, we had a sales growth of 3% with INR 5.6 billion of the sales.”
Shailesh Sharma, page 4 of the filed PDF · View the filing
Profit before tax: 770 basis points drop, about 9% (Q4 FY26 vs Q3 FY26)
p. 4
“We had 770 basis points drop in our profit before tax, which is about 9% due to previous quarter performance, including certain one-off gains leading to a higher profitability, which includes gain on forex transaction, higher income from fixed deposits and reversal of some employee cost provisions.”
Shailesh Sharma, page 4 of the filed PDF · View the filing
Net working capital: increased by about 4.6% (Q4 FY26)
p. 4
“Moving to our net working capital. It increased by about 4.6% due to one-off factors and this same is expected to normalize as we move forward.”
Shailesh Sharma, page 4 of the filed PDF · View the filing
Sales: INR 20.3 billion, 12.8% growth (FY26)
p. 4
“If you look at our full year performance sales growth. It sales grew by solid 12.8% to amount INR20.3 billion.”
Shailesh Sharma, page 4 of the filed PDF · View the filing
Profit before tax: dropped by 694 basis points (FY26)
p. 4
“However, profit before tax dropped by 694 basis points, which was due to a variety of factors, including mix, discounts as well as the reasons explained in the introductory statement.”
Shailesh Sharma, page 4 of the filed PDF · View the filing
Net working capital: improved by 3.7% year-on-year (FY26)
p. 4
“For the full year, net working capital improved by 3.7% year-on-year.”
Shailesh Sharma, page 4 of the filed PDF · View the filing
Quarterly sales: INR 5.55 billion, 3% QoQ, 14.8% YoY (Q4 FY26)
p. 4
“We achieved highest quarterly sales of INR 5.55 billion for this financial year with a quarter-on-quarter growth of 3% and year-on-year growth of about 14.8%, which was primarily driven by higher growth in cars, 2-wheelers and powertrains, partly offset by a drop in distribution business.”
Mayank Holani, page 4 of the filed PDF · View the filing
OEM sales mix: 66% (Q4 FY26)
p. 4
“In terms of mix, original equipment manufacturers accounted for about two-third of our sales, that is about 66%, while distribution sales were about 20%, exports 8% and SKF Industrial share stood at 6%.”
Mayank Holani, page 4 of the filed PDF · View the filing
Full year sales growth: 12.7% (FY26)
p. 5
“Sales for financial year grew by about 12.7% and mainly it's contributed by OE sales, which grew by a strong 20%, while exports and distribution dropped a bit.”
Mayank Holani, page 5 of the filed PDF · View the filing
Cash flow: INR 4.05 billion, 85% cash conversion ratio (FY26)
p. 5
“Our cash flow for the year stood at INR 4.05 billion, which represents a cash conversion ratio of about 85%.”
Mayank Holani, page 5 of the filed PDF · View the filing
IIP growth: 4.1% (Q4 FY26)
p. 4
“IIP growth since last 3 quarters has been stable and was 4.1% for Q4 2026.”
Shailesh Sharma, page 4 of the filed PDF · View the filing
Manufacturing PMI: 53.9 (March 2026)
p. 4
“Manufacturing PMI growth stood at 53.9 for March '26.”
Shailesh Sharma, page 4 of the filed PDF · View the filing
Iron and steel production growth: 9.7% YoY (Q4 FY26)
p. 4
“Iron and steel production was highest during Q4 financial year 2026 with 9.7% year-over-year growth.”
Shailesh Sharma, page 4 of the filed PDF · View the filing
EBITDA margin (automotive): 15.3% (FY26)
p. 15
“The EBITDA margin, which you mentioned, okay, so last financial year, if you look at it, it's about 15.3%.”
Mayank Holani, page 15 of the filed PDF · View the filing
Top 5 customer revenue concentration: close to 50%
p. 11
“The top 5 customers typically represent about close to 50%.”
Girish Kumar, page 11 of the filed PDF · View the filing
Top 10 customer revenue concentration: close to about 70%
p. 11
“Top 10, I would rather say it could be close to about 70%.”
Girish Kumar, page 11 of the filed PDF · View the filing
EV share of 2-wheeler business: about 6%
p. 8
“Yes. I mean the current 2-wheeler is about 6% and then the passenger vehicles is about 4%.”
Girish Kumar, page 8 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
PBT margin — 11-12% · near future
stated firmly by Mayank Holani
p. 6
“Now talking about the sustainable margin, we could be looking at 11-12% kind of margin in the near future, while obviously in long term, the focus would be on improving it further, but the sustainable margin will be that.”
Mayank Holani, page 6 of the filed PDF · View the filing
Capital expenditure — around INR 500 crores · FY26 to FY28
stated firmly by Shailesh Sharma
p. 9
“So, from '26 to '28, we have around INR 500 crores investment, which will go through each year.”
Shailesh Sharma, page 9 of the filed PDF · View the filing
Capital expenditure — around INR 200 crores · FY26-27
stated firmly by Shailesh Sharma
p. 9
“It's going to be spent, which will spill over to '27 a little bit in the first quarter. So, you can say in the financial year '26-'27 is around INR 200 crores.”
Shailesh Sharma, page 9 of the filed PDF · View the filing
Revenue growth CAGR — 6% to 8% · by 2028
stated as an aspiration by Shailesh Sharma
p. 11
“Yes, but you can consider around 6% to 8% CAGR.”
Shailesh Sharma, page 11 of the filed PDF · View the filing
Demerger-related costs — no further impact · going forward
stated firmly by Mayank Holani
p. 8
“We don't have much of the demerger-related costs in Q4 and going forward also, we don't see any demerger-related costs specifically to be in our future.”
Mayank Holani, page 8 of the filed PDF · View the filing
EBITDA margin recovery — a couple of quarters
stated as an aspiration by Shailesh Sharma
p. 15
“And this is a kind of transition, which is happening, onetime cost sitting here and there slowly, so maybe you may be seeing, but we are very hopeful and we are confident about going forward, maybe after a couple of quarters, we will become stable and we will be back to normal.”
Shailesh Sharma, page 15 of the filed PDF · View the filing
Raw material cost pass-through
stated conditionally by Shailesh Sharma
p. 8
“So that is on the way starting with the aftermarket. And as per agreement with OEM, whatever increase in steel price and something happens, we get it.”
Shailesh Sharma, page 8 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said Q4 had few demerger-related costs, and after removing prior one-off gains margins were at par; sustainable PBT margin is expected at 11-12%.
Answered by Mayank Holani
Asked by Krupashankar NJ: What is the sustainable margin expectation going into FY27 and what caused the margin deterioration?
p. 6
“Now talking about the sustainable margin, we could be looking at 11-12% kind of margin in the near future, while obviously in long term, the focus would be on improving it further, but the sustainable margin will be that.”
Mayank Holani, page 6 of the filed PDF · View the filing
Management said automotive is over 90% localized while trading with Industrial continues due to capacity constraints and is expected to reduce over time.
Answered by Shailesh Sharma
Asked by Krupashankar NJ: What is the trading arrangement with SKF Industrial and how long will it continue?
p. 7
“As I said, in automotive, our focus is on localization. It's already more than 90%, and that is going to continue. Industrial, if you are a little bit confused with the industrial mix, that is not going to sustain.”
Shailesh Sharma, page 7 of the filed PDF · View the filing
Management confirmed a near-term margin pressure due to the lag between cost inflation and price pass-through.
Answered by Shailesh Sharma
Asked by Mumuksh Mandlesha: Is there gross margin pressure due to lag in raw material cost pass-through?
p. 8
“Yes, that's true.”
Shailesh Sharma, page 8 of the filed PDF · View the filing
Management attributed the decline to growth coming largely from OEM sales, which carry a different (lower) margin than aftermarket.
Answered by Mayank Holani
Asked by Viraj: What explains the drop in gross margin from 55-60% to about 46%?
p. 9
“So, when you say aftermarket sales have not dropped much, you're right, but the growth, if you see, has all come from OEM.”
Mayank Holani, page 9 of the filed PDF · View the filing
Management stated there has been no change in royalty or trademark fees compared to pre-demerger.
Answered by Mayank Holani
Asked by Ravi Purohit: Has royalty payout to the parent increased post-demerger, affecting margins?
p. 14
“Now as far as royalty is concerned, there is no change in any royalty or trademark fees from the earlier settlement. So, it remains the same, how it was pre-demerger.”
Mayank Holani, page 14 of the filed PDF · View the filing
Management said the current period represents a transition with one-time costs and capacity constraints leading to Industrial trading, and expressed confidence in returning to prior margin levels over time.
Answered by Shailesh Sharma
Asked by Ravi Purohit: Why do post-demerger automotive margins appear lower than the historically communicated 16-19% EBITDA range?
p. 16
“About EBITDA, see, this is true that in automotive, we have more localized product. But if you see automotive, it's very price-sensitive market, especially OEM.”
Shailesh Sharma, page 16 of the filed PDF · View the filing
Risks flagged
Limited automotive manufacturing capacity requiring reliance on trading from SKF Industrial
p. 10
“The capacity is a little higher side or I must say the demand and capacity point of view, we are short of, in automotive, we are short of little capacity. So, we are buying from Industrial.”
Shailesh Sharma, page 10 of the filed PDF · View the filing
EV adoption pace slower than anticipated
p. 7
“But as you see the adoption, or EV adoption has still not caught up the pace which was anticipated earlier.”
Shailesh Sharma, page 7 of the filed PDF · View the filing
Discounts offered in aftermarket business to remain competitive impacting net sales
p. 9
“But on a net sales point of view, it is a little bit down because of the discounts we offered to remain in the market and to beat the competition.”
Shailesh Sharma, page 9 of the filed PDF · View the filing
One-off demerger and transition-related costs impacting profitability
p. 17
“While restructuring costs temporarily impacted our profitability, our strong revenue growth, robust demand across automotive and strategic focus on electric mobility and sustainability gives us confidence for the future.”
Shailesh Sharma, page 17 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.