Release Date: January 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bosch Ltd (BOM:500530, Financial) reported a 6.2% growth in revenue from operations for the quarter, driven by strong performance in the Mobility Aftermarket, two-wheeler, and Consumer Goods businesses.
- The two-wheeler business saw a significant growth of 23.9%, attributed to higher sales of exhaust gas sensors and the implementation of OBD II norms.
- The Consumer Goods business grew by 8.8%, driven by increased demand for grinders, drills, cutters, spares, and accessories.
- Bosch Ltd's EBITDA improved by 8.1% over the same period of the previous year, with EBITDA margins increasing from 12.3% to 12.6%.
- The company showcased its innovative advancements at the Bharat Mobility Global Expo 2025, highlighting its commitment to shaping India's mobility future with advanced solutions.
Negative Points
- Profit after tax decreased to 10.3% of revenue from operations compared to 12.3% in the same quarter of the previous year, impacted by restructuring costs.
- The heavy commercial vehicle segment experienced subdued demand due to a slowdown in mining and construction activities and rising vehicle costs.
- The light commercial vehicle market growth remained muted, affected by a slowdown in economic activity, particularly in urban centers.
- The Consumer Goods segment experienced a seasonal decline in margins, attributed to inventory adjustments by dealers at the end of the calendar year.
- Bosch Ltd made a provision of INR471 million for restructuring its operations to remain competitive in the Mobility business, impacting profitability.
Q & A Highlights
Q: Any update on the TREM V implementation date?
A: Guruprasad Mudlapur, Managing Director and Chief Technology Officer, stated that there are no updates on the TREM V implementation date, and it remains set for April 1, 2026. If there are any changes, the company will inform stakeholders.
Q: What is the current band of employee cost as a percentage of revenue?
A: Karin Gilges, Chief Financial Officer, explained that the employee cost is elevated due to the completion of 27 R&D service projects, which increased personnel costs. In a steady state, employee costs are expected to be between 8% to 10% of revenue, depending on the product mix.
Q: How has the rental income from properties changed compared to last year?
A: Karin Gilges noted that rental income has increased by approximately 6.5% compared to the previous year, primarily due to higher office space demand and annual rental rate adjustments.
Q: What is the rationale for divesting the Building Technologies business, and what are its margins?
A: Guruprasad Mudlapur explained that the divestment is part of a global realignment strategy, with the Building Technologies division being sold to Triton. The business has an EBIT margin of about 6%.
Q: How is Bosch India leveraging its position in the automotive industry with the shift towards electric vehicles and alternate fuels?
A: Guruprasad Mudlapur highlighted Bosch's consistent investment in R&D, focusing on advanced technologies like hydrogen and electrification. Bosch India leverages global platform developments and local innovations to maintain its leadership in the mobility sector.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
