Bosch Ltd
NSE:BOSCHLTD
US |
Fubotv Inc
NYSE:FUBO
|
Media
|
|
US |
Bank of America Corp
NYSE:BAC
|
Banking
|
|
US |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
|
US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
US |
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
|
CN |
NIO Inc
NYSE:NIO
|
Automobiles
|
|
US |
Fluor Corp
NYSE:FLR
|
Construction
|
|
US |
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
|
US |
TopBuild Corp
NYSE:BLD
|
Consumer products
|
|
US |
Abbott Laboratories
NYSE:ABT
|
Health Care
|
|
US |
Chevron Corp
NYSE:CVX
|
Energy
|
|
US |
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
|
US |
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
|
US |
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
|
US |
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
|
US |
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
21 036.25
38 795.6
|
Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
Fubotv Inc
NYSE:FUBO
|
US | |
Bank of America Corp
NYSE:BAC
|
US | |
Palantir Technologies Inc
NYSE:PLTR
|
US | |
C
|
C3.ai Inc
NYSE:AI
|
US |
Uber Technologies Inc
NYSE:UBER
|
US | |
NIO Inc
NYSE:NIO
|
CN | |
Fluor Corp
NYSE:FLR
|
US | |
Jacobs Engineering Group Inc
NYSE:J
|
US | |
TopBuild Corp
NYSE:BLD
|
US | |
Abbott Laboratories
NYSE:ABT
|
US | |
Chevron Corp
NYSE:CVX
|
US | |
Occidental Petroleum Corp
NYSE:OXY
|
US | |
Matrix Service Co
NASDAQ:MTRX
|
US | |
Automatic Data Processing Inc
NASDAQ:ADP
|
US | |
Qualcomm Inc
NASDAQ:QCOM
|
US | |
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Earnings Call Analysis
Q2-2025 Analysis
Bosch Ltd
In the latest earnings call for Bosch Limited, the management began with an overview of the global and macroeconomic landscape, noting a fading expectation for economic recovery in Europe while the U.S. shows strong job growth and resilient GDP growth at 3.2%. In contrast, India is reported as one of the fastest-growing large economies, with increasing consumer spending, particularly in rural areas, spurred by favorable agricultural conditions and decreasing inflation. Importantly, Bosch anticipates that growth in 2024 will likely mirror the performance of 2023.
For the quarter ending September 2024, Bosch reported operating revenues of INR 43,943 million, a 6.4% increase year-over-year. The Mobility Aftermarket, Power Solutions, and Consumer Goods businesses drove this growth. Revenue for the first half of FY '24-25 reached INR 87,111 million, reflecting a 5.1% increase compared to the previous year. Notably, EBITDA for July-September 2024 improved by 14.1% to INR 5,605 million, with the EBITDA margin also rising from 11.9% to 12.8%, attributed to improved material costs and steady revenue growth.
Profit after tax, however, faced challenges due to exceptional items. The current quarter saw profit after tax stand at 12.2% of revenue, significantly lower than 24.2% from the same quarter last year, where previous profits included a one-off gain from the sale of a business unit. This year, the profit after tax included an exceptional gain from selling the OE/OES Diagnostics business worth INR 485 million, which slightly mitigated profitability.
The earnings call highlighted different sector performances. The Mobility business saw a growth of 6.7% year-on-year, driven chiefly by the Power Solutions division and robust demand in the two-wheeler segment, which grew by 13.4%. Similarly, the Consumer Goods business increased by 10.1%. The Building Technologies division excelled with a remarkable 20.1% growth, largely due to a surge in video surveillance system installations. This sectorial analysis indicates a diversified growth trajectory across Bosch's core areas.
Looking ahead, Bosch's management maintains an optimistic outlook for the automotive industry and related sectors. The company has emphasized the importance of navigating the transition towards regulatory norms such as the upcoming TREM V, scheduled for implementation in April 2026. The aim is to enable a higher level of localization in component production from the outset, which reflects Bosch’s proactive approach to market changes. The management also indicated readiness to meet demands related to the anticipated pre-buy effects ahead of these regulatory changes.
Despite witnessing growth in certain segments, the management acknowledged challenges in the commercial vehicle market, forecasted to remain subdued. High inventory levels and slowing infrastructure projects are expected to hinder growth. Notably, light commercial vehicles face competition from the growing three-wheeler market. This indication suggests the need for cautious monitoring of inventory and demand dynamics as the festive season approaches.
Bosch continues its commitment to innovative solutions, having launched new products in various divisions such as the Impact Screwdriver Range and advanced camera systems within its Building Technologies unit. The emphasis on local manufacturing, such as producing the FLEXIDOME IP Starlight 5000i camera in India, highlights Bosch's strategy to deepen its domestic footprint and enhance local production capacities.
In conclusion, Bosch appears well-positioned for future growth, supported by solid financial performance and a strategic focus on innovation, local sourcing, and navigation of regulatory changes. The management's confidence in maintaining growth levels analogous to 2024, along with strategic investments and sector diversification, sets a potentially promising outlook for both investors and stakeholders.
Ladies and gentlemen, good day, and welcome to Bosch Limited 2Q FY '24-'25 Post Results Conference Call hosted by B&K Securities. We have with us today from Bosch management Mr. Guruprasad Mudlapur, Managing Director and Chief Technology Officer; and Ms. Karin Gilges, Chief Financial Officer. [Operator Instructions] Over to you, sir.
Good evening, everyone, and thank you for joining us today. I'll begin with an overview of the global and macroeconomic landscape, followed by financial and business highlights. Globally, the expectations for economic recovery are fading, especially in Europe, where manufacturing is declining, services growth is slow and the GDP growth is very minimal, with Germany facing a very weak economy. Meanwhile, the U.S. economy is doing well with strong job growth and 3.2% GDP growth.
Input costs, including shipping, raw materials and wages are constantly lower and stable. However, this trend is not expected to continue. Although the global inflation has remained stable, India remains -- seems to have imported part of the inflationary pulses, majorly contributed by input prices. India still remains one of the fastest -- world's fastest growing large economies. Growth is likely to pick up, driven by increasing consumer spending, especially in rural India as inflation subsides and agricultural output improves after favorable monsoon conditions. Looking ahead, we anticipate 2025 to mirror 2024's growth trajectory in India.
Next slide, please. After hitting an all-time high in FY 2024, the automotive industry saw a slight 1% decline in Q2 FY '25 compared to Q2 FY '24. This is due to the high base effect, coupled with election slowdowns and unfavorable climate conditions. The passenger car segment struggled with high inventory levels of around 70 days in this quarter. Weak consumer demand has slowed the growth despite moderate retail gains [indiscernible]. Economic factors like slower retail credit and shifts in spending impacted entry-level models. The festive season is crucial for clearing excess inventory, though caution remains.
Heavy commercial vehicle segment declined due to high base effects, slow infrastructure projects and decreased fleet utilization of heavy vehicles. Bus demand, however, remains strong, thanks to large orders from state transport undertakings. Light commercial vehicles segment faced pressure, especially in lower tonnage categories from growing 3-wheeler competition. Two-wheelers recorded strong rural demand and new launches drove growth, with electric 2-wheelers boosted by favorable policies and subsidies. Growth is expected to continue through the festive season.
Three-wheelers experienced robust demand, especially for electric models in passenger and cargo applications supported by government subsidies and rising last-mile urban connectivity needs. Tractors showed slight growth due to favorable monsoons, strong domestic demand and higher minimum support price, and is expected to sustain this growth.
Next side. In this slide, we have illustrated the market's trajectory from the peaks of FY 2019 through the challenges posed by COVID to the subsequent recovery. The automotive market ended FY 2024 on a positive note, reaching all-time highs in car and LCV segments and maintaining momentum in other segments. Looking ahead, the election year high base effect and historical trends suggest moderate growth for the automotive industry. The recent inventory buildup in the car segment remains a concern, but the underlying economic conditions are strong and India's growth narrative remains positive.
Next slide, please. Sector-wise sales performance quarter-on-quarter. The Mobility business has seen growth -- has grown by 6.7% in July-September 2024 as compared to July-September 2023, driven mainly due to Power Solutions business, which grew by 5.7%, mainly due to increase in sales to passenger car segment, increase mainly coming from diesel, EV models, increase in sales for genset applications with common rail systems and increase in export sales of electronic controlled throttle body, in-line pump and nozzle holders.
The Mobility Aftermarket business, which grew by 8.8% on account of higher demand from lubricants and diesel systems. Two-wheeler business grew by 13.4%, mainly due to higher sales of fuel injectors and exhaust sensors, driven by increased demand from prominent domestic motorcycle manufacturers. The consumer goods business grew by 10.1%, driven by high demand for grinders, drills, cutters, spares and accessories on account of market growth.
The Building Technologies business grew by 20.1% on account of execution of high number of orders for installation of video surveillance and communication systems. The Mobility business has grown by 5.4% in April to September 2024 as compared to April to September '23, driven mainly due to Power Solutions business, which grew by 4%, mainly due to increased sales in passenger car segment, mainly fuel, air and ignition components, electronic throttle body and EGT components. The Mobility Aftermarket business grew by 8.4% on account of higher demand from diesel systems and rotating machines.
Two-wheeler business grew by 14%, mainly due to higher sales of fuel injectors on account of increase in market demand for popular sports and commuter motorbikes. The Consumer Goods segment business grew by 7.6%, driven by higher demand for grinders, cutters, drills, spares and accessories on account of market growth. Building Technologies business grew by 19.7% on account of execution of high number of orders for installation of video surveillance and communication systems.
Next slide, please. Quarter-on-quarter, revenue from operations in July to September '24 stood at INR 43,943 million, which is a growth of 6.4% over July-September 2023. The growth is driven by Mobility Aftermarket business, Power Solutions business and Consumer Goods business, as seen in the previous slide. Likewise, revenue from operations in April to September '24 stood at INR 87,111 million, which is a growth of 5.1% over April-September '23. The growth is driven by Mobility Aftermarket business, Power Solutions business and Consumer Goods business.
Quarter-on-quarter, EBITDA in July-September '24 was INR 5,605 million, which grew by 14.1% over the same quarter of previous year. EBITDA as a percentage of total revenue improved from 11.9% in July-September '23 to 12.8% in July-September '24. The improvement in the EBITDA margin is mainly attributable to growth in revenue and improvement in material cost. EBITDA in April-September '24 was INR 10,802 million, which grew by 12.6% over the same period of previous year. EBITDA as a percentage of total revenue improved from 11.6% in April-September '23 to 12.4% in April-September '24. The improvement in the EBITDA margin is again on account of growth in revenue and improvement in material cost.
The profit after tax stood at 12.2% of revenue from operations as compared to 24.2% over same quarter of previous year. Previous year had a onetime exceptional item of profit on sale of Project House Mobility Solutions, PJMS business, of INR 7,850 million. Likewise, in the current quarter, that's July-September 2024, also has an exceptional item via sale of OE/OES Diagnostics business of INR 485 million. Likewise, profit after tax stood at 11.5% of revenue from operations as compared to 17% over same period of previous year. The difference is on account of exceptional item, that is profit on sale of PJMS business, which was there in the previous year.
Next slide, please. Bosch Limited's Power Solutions division has played a major role in supporting a major OEM to applicate the Bosch engine management system for their first-ever gasoline direct injection engine. The Power Solutions division also contributed towards advanced hardware, software and calibration solutions for the 1.2-liter gasoline engines.
Bosch has launched 2 connected solutions called vehicle load detection and driver analytics to the market, which will aid commercial vehicle owners to monitor the vehicle's usage and driving parameters more closely and enable optimal performance. At the fifth CII National DigiTech Circle Competition 2024, Bosch's Jaipur plant won the gold medal for digitization in maintenance and energy management and silver for best case study of innovative business models for digitization in manufacturing and service.
Coming to 2-wheeler and powersports, it's a moment of immense pride to have supported the launch of the world's first CNG bike featuring the Bosch Engine Management System. With this successful release, Bosch is well positioned to support 2-wheeler industry for CNG as fuel technology. The Bosch Engine Management System, EMS, is a bi-fuel solution and can operate either on CNG fuel mode or gasoline fuel mode. The system has the capability to switch between fuel modes on demand smoothly on the go with precise control on performance. Bosh EMS is developed to meet the latest emission norms for the Indian market for 2-wheelers, which is BS-VI OBD II Stage A. The solution offering is robust and package protected for OBD II Stage B.
Bosch has also partnered with a premium 2-wheeler brand integrating our engine management systems and safety systems. The Bosch MSC technology will further open the market for advanced safety systems to the Indian market under the umbrella of Bosch MSC for all campaigns. It's a moment of pride to be recipients of special jury commendation at 6th Edition of FICCI Road Safety Awards and Conclave 2024 for exceptional interventions in promoting road safety through the MSC for all initiative across the nation. The award presented by Sri Nitin Gadkari, Minister for Road Transport and Highways of India, acknowledges Bosh's significant contributions towards enhancing road safety nationwide.
In the Mobility Aftermarket division, we faced some challenges in the independent aftermarket, or IAM, due to lower demand in diesel space category. On a positive note, several key business product lines have shown remarkable performance, with diesel, rotating machines, battery and wipers all experiencing significant double-digit growth in the Indian market. In addition to financial performance, I'm thrilled to announce the inauguration of our 100th Bosh service 2-wheeler workshop. This milestone marks a significant step in expanding our service network, ensuring that we continue to provide topnotch service solutions to our customers.
Next slide, please. Beyond Mobility. Power Tools, our global Power Tools division, has launched the Impact Screwdriver Range, or ISR, and Impact Drill System, or IDS, enhancing tool bag coverage to meet industrial demand. In measurement tools, we've introduced new line lasers and wall lasers for greater precision in construction and design. Our market campaigns are also gaining traction, with Cordless Campaign 2.0 promoting the power of cordless tools under the slogan, Cordless Power Tools Mein Hai Dum, and Hard Work Made Easier campaign, showcasing how our innovations simplify tough tasks for professionals.
The Building Technologies division of Bosch Limited launched the FLEXIDOME IP Starlight 5000i camera, our first made in India product from the business unit Video Systems. This milestone enhances our domestic production capabilities and underscores our commitment to local manufacturing and innovation. Additionally, we are expanding our professional sound segment with new products under the ElectroVoice brand and Dynacord, enriching our Audio Solutions' portfolio.
Furthermore, Bosh Limited has received the FIST Award 2024 for the Safe and Secure Office Campus category awarded by Fire and Security Association of India, highlighting our dedication to a safe and secure working environment.
Next slide, please. With these updates, I conclude my speech. Thank you all for listening patiently. We will now address your queries. Please feel free to ask your questions.
Thank you, sir. We'll now begin the question-and-answer session.
[Operator Instructions] The first question is from Jinesh Gandhi.
A couple of questions from my side. One is, given that the TREM V norms as of now are to be implemented from April 2026, can you talk about how do we plan to localize components for TREM V norms? Would it be in sync with what we have done in the past, as volume ramps up, we localize that? Or are we thinking differently this time?
We are quite well prepared to handle TREM V localization and we can expect a much higher level of localization for TREM V starting from the beginning itself. We are really hoping that there is no further postponement or change in the days of TREM V rollout. But assuming everything goes on time, we are on our side ready to meet the demands of the industry.
Got it, got it. And secondly, in this quarter, we have seen a good decline in share of traded goods. Is it because of the full benefit of localization is now reflecting in 2Q numbers? Or it's also to do with lower contribution of CVs in this quarter because of volume decline that CV industry saw?
Yes. I'll take this question. Of course, it's a mix. It depends entirely what product mix we have. This month we had a favorable product mix on the one side. But of course, we are going ahead with the localization, and step by step, we see what we implement here in India. So I would not say it's black and white. It's a mix. And yes, we had, therefore, a quite favorable mix, but see also that we're going ahead with sort of localization.
Okay. But would it be fair to say that the ramp-up of localization is now totally done? Or there will be some more benefit to come in as volumes go up as well?
Yes. So not only volumes going up, but of course, products coming in, new generations coming in. We have -- for example, 3 years ago, we have implemented our injector line for the commercial vehicles, that we are on a good track already for the components. But this is not finished up to now. So actually, it is an ongoing process. We are looking all the time into our portfolio where can we localize, what can we localize. So it is not finished and done. It's an ongoing process.
Got it. And last question from my side is on CapEx. So first half CapEx was roughly about INR 100 crores. Any guidance for full year CapEx? Usually, we spend between INR 500 crores to INR 600 crores. So just wanted to clarify what it will be for FY '25.
Yes. So we have also this year a decent amount, roughly INR 4,000...
INR 4,000 million. And it is a little bit lower compared to last year because the Adugodi campus is now finished. And this is mainly plant and machinery. And traditionally, in the first half year, we are starting to implement machines accounting. But until we really go into the SOPs and -- that we are capitalizing this CapEx is then in the third and fourth quarter.
Next in line will be [ Atman ]. [ Atman Shah ]? He has logged out.
Next in the line is Mr. Pramod Amthe.
So the first question is with regard to the tractor supplies. I wanted to know your preparedness as the industry on a high base looking for a double-digit growth in the second half. And also looking at if the pre-buying comes through, again, there can be a sustenance of double digit. How are you prepared to handle this on a high base the double-digit volumes, one?
Second, at the end of it, again, you have to transition to the TREM V. Isn't -- then the volatility of volumes, how will you be prepared to handle in the short term? Can the CVs be -- capacity be fungible to tractors? Or how does it actually play out?
Yes. So if I understand your question right, you are hinting that there will be some pre-buy effect before TREM V came, and are we prepared to handle those additional volumes. And post TREM V comes in, how are we equipped to handle those volumes. That's the question, right?
Correct, correct.
Okay. I mean, we are certainly equipped very well to handle the pre-buy effects. We've had -- we always have discussions on topics like this together with our OEMs. And we anticipate -- if they anticipate any pre-buy which has happened in several occasions in the past, like, for example, BS-IV to BS-VI and other norm transitions, we work with them very closely and ensure that we are fully prepared and we are ready to support on any capacity increase that we need to cater to these demands. So on pre-buy effects, we certainly can handle it. On TREM V, I think I've already answered it. We are well prepared to handle the transition and we look forward.
The second question is with regard to the car segment. There seems to be some policy favorism for hybrids. I wanted to know how does Bosch play a role in terms of content per vehicle when the existing ICE engines go for hybrid? What parts you really supply and how you handle the customer? Any case studies for India already happening? Or how are you seeing this business shaping up?
Yes. So we are in discussion with several OEMs on hybrids, and some are quite active and have a couple of models already in the market, others are still in early time phase. There is no confirmed policies about -- that we see other than 1 or 2 states doing something independently. But we'll have to wait and watch how this develops, but we certainly have capabilities to support OEMs through this.
Next in the line will be Mr. Gokul.
Sir, 2 questions. At the start of the year, you had sort of indicated that the growth would mirror the growth which we've seen in FY '24, given Q1 being a more transient quarter because of the elections. Given that first half has gone and there have been some changes in the underlying automotive market, would you want to just revisit your growth expectation for FY '24?
So your question is, would we like to revisit growth estimates for '25? Is that what you're saying or...
Yes, I think that is the question, sir. I think he has gone to mute. That is the question, sir.
Okay. So I mean, we -- our business plan cycle constantly looks at what's happening in the market. We take feedback not just from the market, the inventory positions in the market, what our OEMs tell us and what we need to plan for the year. Of course, we have complex internal tooling, which also helps us fine-tune the possibilities under various scenarios in terms of what is the possible GDP growth rates, how are different sectors performing, and based on that, what should we plan for in terms of our plan, different segment level growth opportunities.
So this is a thing we constantly do. So as we see today, the indicators are that '25 is likely to mirror 2024 growth rates. There can be ups and downs, and we're well prepared to handle that. And if there is a change -- we evaluate this at very regular intervals within our business planning cycles and we will adapt [ certainly ].
Okay. Two more questions. So one is, if you could please comment on the underlying CV industry, because first half has been fairly weak for the -- both the major OEMs. What are you seeing on the trends and interactions with your customers on the outlook for the industry for second half and going forward?
CV industry we expect it to remain muted or where things are an inch down. I think that's the current expectation also.
Perfect. Great. Lastly, just on exports front. While the external environment has been very muted due to the geopolitical conditions, are you seeing things pick up over there? And what's the outlook for the near term over the next 6 to 12 months for the exports business?
Okay. So we don't look at exports on very short-term basis. That's not, again, we're banning our exports as well. We consider exports as a longer-term opportunity, while there are some medium, short-term gains based on some capacities or some changes in the market abroad. That's one way of looking at it. And we will certainly cater to that as it comes. But for us, growing our export business is much more of a longer-term opportunity over, let's say, in the next 5 years or so. So we are preparing ourselves to [Audio Gap]. We're continuing increase in our export growth as we move forward.
Okay. What would be the export growth in H1 versus last year's H1?
We have -- this quarter, we have had slightly increase in the exports. But as already mentioned, it highly depends on the demand, where we have in the international global network, production network some demands. So overall, we see a growth of roughly 10% if we compare the previous year to this year. But again, for us, the long-term perspective is much more interesting, and this was what we had in the third quarter. And yes, of course, we are all the time appreciate if we can support our international production growth.
[Operator Instructions] In the meantime, I'll read out the questions from the chat box.
First question is, we have indicated about good growth in the PV segment despite underlying industry being weak. What will drive this growth?
Yes. I mean the PV segment is connected to -- quite a lot connected to what happens in our cities, disposable incomes, a trend towards premiumization or affordability, GDP growth in general, and how well people are able to drive in cities and further penetration in our Tier 2 and Tier 3 towns. So these would be the broad trends. And yes, we track these trends and we expect steady growth in our PV segment [indiscernible].
The next question is, we indicated safety systems for 2-wheelers. What will be the components on 2-wheeler systems' safety or in the listed entity?
So yes. I mean, we have our 2-wheeler division which offers some components into this market, while majority of the safety systems go from our sister company, RBIC. But on the listed entity, our 2-wheeler division also caters to some segments, sensors and all that.
Okay. And some questions from the chat box. Whether any restructuring under progress or -- on this thing for -- in the -- all the other listed companies in the Bosch stable in India?
Sorry. What was the question [indiscernible]? Sorry...
Basically, the question is, see, whether -- see, we have a lot of unlisted companies in the auto space in India. Whether any chance of restructuring or any whether progress...
Yes. So I think I've spoken about this a few times in the past. We are constantly looking at our product portfolio, our business activities in the listed company and also business activities outside the listed company in the Indian context. We are very open to look at and [indiscernible] these things. These are discussions that are going on in the RBI and Board with the promoter. As and when we have information to share, we'll certainly use that opportunity to share it with all. So all I can say is that these discussions are ongoing in terms of multiple elements, and we will share it as appropriate.
[Operator Instructions] I think that's all, sir. Yes. There is no more questions. And any closing comments you want to make, sir?
I would say thank you to everybody who joined the call and showed interest. We're doing our best to ensure excellent business performance under difficult -- currently slightly difficult market conditions, and we hope to continue to keep this transitory going. And you will hear more from us in the coming 12 months. Thank you.
Thanks, sir. Thank you all the participants. We can now disconnect our lines.