Highlights of the call

GDP growth on recovery path as manufacturing activity accelerated with companies restocking their warehouses after temporary disruption caused by uncertainties surrounding GST implementation.

Core industry and IIP showing growth and stability in H2 of 2017 as effects of demonetization and GST are subsiding.

The positive momentum for the economy will continue for quarter to come according to economists and hopefully the management sees better results in the coming quarters.

During the quarter on qoq basis it saw moderate growth of 2.8% mainly supported by Industrial (2%) and Exports (6%).

During the quarter on yoy basis it saw 8.8% increase driven by strong growth in Automotive (22%) and Exports (30%)

CY 2017 saw 6.5% sales growth driven by strong growth in Automotive (17%) and Exports (21%), while growth in Industrial was relatively flat.

Sales mix affirms ongoing efforts of localization.

Company manufactured products for domestic market accounted for 54% and it grew 5.8%.

Company manufactured products for exports market accounted for 20.6% and it grew 20.6%.

Trader products accounted for 28% and it grew 0.5%.

PV and tractors drove the growth in 2017.

Two wheelers recovered from Demonetization.

The company is seeing strong automotive growth and high exports.

The company is focused on sales growth in recovering market.

CV showed strong recovery in H2 after dual impact of Demonetization and BSIV implementation

Better sales mix and operational performance have led to improvement in EBT margin.

Schaeffler India will be merging its two arms, INA Bearings and LuK India, to improve cost and supply-side efficiencies. The key objective of the merger is to combine the strengths and competencies of all three Schaeffler entities and establish one strong listed entity. The transaction expected to be completed in 2018 and is currently on track.

The new entity will have four plants, one R&D centre and about 3,000 employees.

INA India and LuK India are seeing consistently strong revenue growth in Engine systems, Chassis and Transmission systems.

These two companies also saw consistent improvement in EBT led by sales growth and operational performance

The company has good order book from the steel sector thanks to government's initiatives for the steel sector.

The government's effort towards core sector should see good growth for steel and other core sectors in CY 2018.

Exports order book is also strong.

FY 2019 will see higher steel pricing after a past few years of low prices.

The company is looking at better sourcing

The company will launch few new products in CY 2018 which will help post good growth.

LUK has higher 90% localization than INA which has 60% localization.

Global economics are growing well and the company has good export order book as global demand is high.

The company has plans of investing $ 40-45 million for each year in 2018 and 2019. This is double than previously planned capex of $ 18-20 million.