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Informist, Tuesday, Nov. 12, 2024

By Steffy Maria Paul and Sunil Raghu

MUMBAI/AHMEDABAD – Bosch Ltd. expects its growth rate in the financial year 2024-25 (Apr-Mar) to mirror its growth in FY24, the company's management said in a post-earnings call Tuesday. Growth is likely to be driven by an increase in consumer spending, especially in rural areas, as inflation subsides and agricultural output improves after a favourable monsoon, the management said. 

A back-of-the-envelope calculation shows the company must clock 19% revenue growth on year for Oct-Mar to achieve its guidance of mirroring its growth in FY24. For the first half of FY25, the company reported a revenue of INR 87.11 billion, up 5% on year. In FY24, the company had reported revenue of INR 167.27 billion, up 12% on year.

The engineering and technology solutions company reported a net profit of INR 5.36 billion for the September quarter, down 46.4% on year. The company's revenue for the quarter was INR 43.94 billion, up 6.4% on year. The company's earnings before interest, tax, depreciation, and amortisation for the quarter was INR 5.61 billion, up 14% on year.

The company said the growth in its revenues for the quarter was driven by growth in its mobility aftermarket business, which grew by 8.8%, its power solutions business, which grew by 5.7%, and the consumer goods business, which grew by 10.1%. The company said key product lines in its mobility aftermarket business saw double-digit growth in India during the quarter.

The company said its mobility business grew 6.7% during the quarter, driven by the growth in its power solutions and mobility aftermarket business and a 13.4% growth in the two-wheeler segment. Its energy and building technologies business grew 20.1% during the quarter.

The company said its exports grew 10% during Apr-Sept, but added that it looks at its exports as a long-term opportunity. The Indian unit of Germany's Robert Bosch GmbH plans to make capital expenditure of INR 4 billion during FY25, mainly on plant and machinery, the management said. 

The passenger car industry struggled with high inventory levels of around 70 days in the September quarter, the company said. Terming the build-up "concerning", the management said the festival season was important for clearing the excess inventory. Bosch provides technology solutions to automotive companies and the health of the automobile industry has a direct impact on its earnings. However, there was strong demand for two-wheelers, especially in rural areas, and electric two-wheeler sales were boosted by favourable policies and subsidies, the company said. Bosch expects this growth to continue through the festival season.

While demand for buses remained strong owing to large orders from state transport departments, sales of light commercial vehicles faced pressure during the quarter, especially in the lower tonnage categories, from growing competition from the three-wheeler segment, the company said. While the growth for the automotive industry will moderate, the underlying economic conditions are strong and India's growth narrative remains positive, the company said.

On Tuesday, shares of the company closed at INR 33,278.50 on the National Stock Exchange, down 4.9%. The company disclosed its earnings after market hours.  End

Edited by Rajeev Pai

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