SCHAEFFLER - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.3

⚙️ Schaeffler India Ltd (SCHAEFFLER) — Long-Term Investment Analysis

Schaeffler India is a high-quality industrial and automotive component manufacturer with strong fundamentals, global parentage, and a robust product portfolio. It’s a top-tier candidate for long-term investment, especially for investors seeking exposure to precision engineering and EV transition themes.

🔍 Key Financial Metrics

Metric Value Interpretation

P/E Ratio 62.5 Expensive, but justified by quality

ROE / ROCE 18.5% / 25.0% Excellent capital efficiency

Dividend Yield 0.69% Modest, but consistent

Debt-to-Equity 0.01 Virtually debt-free

EPS ₹64.8 Strong earnings base

Book Value ₹348 P/B ~11.6 — premium valuation

Profit Margin ~11.4% Healthy for manufacturing

PEG Ratio Not available Likely high due to valuation premium

📈 Technical & Trend Indicators

Current Price: ₹4,047

DMA50 / DMA200: ₹4,027 / ₹3,726 — bullish alignment

RSI: 45.4 — neutral zone

MACD: 20.3 — mild bullish momentum

Volume: Stable — consistent institutional interest

📌 Ideal Entry Price Zone

Accumulation Zone: ₹3,725–₹3,850

Near DMA200 and support zone

Offers margin of safety with upside potential toward ₹5,000

Entry below ₹3,900 is ideal for long-term compounding

🧭 If You Already Hold SCHAEFFLER

🕒 Holding Strategy

Time Horizon: 5+ years

Catalysts

EV component expansion

New manufacturing facilities (e.g., Tamil Nadu plant)

Global OEM partnerships and exports

Operational leverage and margin expansion

🚪 Exit Strategy

Partial Profit Booking: Near ₹4,950–₹5,100 (all-time high zone)

Stop-Loss: ₹3,600 (below DMA200 and key support)

Re-evaluate: If ROE drops below 12% or P/E exceeds 80 without earnings growth

🧠 Final Verdict

Schaeffler India is a premium industrial compounder with world-class ROCE, near-zero debt, and strong earnings growth. While the valuation is rich, the quality justifies the premium. It’s a buy-on-dips stock for long-term investors focused on manufacturing, automation, and EV trends.

Would you like a comparison with SKF India or Timken to explore other precision engineering plays?

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