Analyst Concall
See automotive aftermarket sales growing 8-10% FY26 - Bosch
This story was originally published at 21:12 IST on 28 January 2025
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--Bosch: Oct-Dec revenue mainly aided by mobility aftermarket sales
--CONTEXT: Bosch's mgmt comments in post-earnings analyst conference call
--Bosch: Staff costs elevated Oct-Dec due to lot of service projects
--Bosch:Diesel components key driver of automotive after-mkt sales Oct-Dec
--Bosch: Lubricant, filter key drivers of automotive after-mkt sales Oct-Dec
--Bosch: In mobility segment, power solutions de-grew quite a bit Oct-Dec
--Bosch: See automotive after-market sales growing 8-10% FY26
By Rajesh Gajra
NEW DELHI – Bosch Ltd. expects aftermarket sales of the mobility or the automotive segment to grow 8-10% in 2025-26 (Apr-Mar), the company's management said at a post-earnings conference call with analysts and investors on Tuesday. The automotive aftermarket business sales rose 8.8% on year in Oct-Dec and 8.5% in Apr-Dec.
Other than the aftermarket sub-segment, the mobility segment of Bosch includes power solutions and two-wheeler segments. The power solutions business contributes the most to the segment sales. The overall growth in the mobility segment was muted in the December quarter at 1.6% on year. The power solutions business "de-grew quite a bit" in the December quarter, the company's management said.
The power solutions business, which constitutes 71% of the overall automotive product sales, declined 1.8% on-year in the December quarter, the company said in the earnings press release.
The automotive power solutions business of the company got hit in the December quarter "mainly on account of degrowth in the heavy commercial vehicles segment due to slowdown in economic activity," the company said in the press release.
The company management said the strong growth in automotive aftermarket sales was primarily driven by "higher demand for diesel systems, automotive batteries and lubricants." There was also good growth in exports of filters and lubricants, the management said.
The two-wheeler segment was a key growth driver for the company's mobility segment in Oct-Dec, with sales jumping up by 23.9%. The company management said the growth was "mainly on account of higher sales of exhaust gas sensors, and (effect of) a ramp-up of OBD2 (on-board diagnostic 2B) norms implementation (by automobile manufacturers) from 1st of April 2025."
On the rise in employee costs as a percentage of revenue, the management said the rise in employee costs in the December quarter was "mainly coming out of a very good turnover (we had) in our service projects," including research and development projects with Bosch's customers. Employee expenses of Bosch rose 18.1% on year to INR 3.95 billion in the December quarter and was a drag on the profitability of the company.
On the restructuring of operations in the emerging electro-mobility business of the overall mobility segment, the management said these adjustments have to be made sometimes to raise productivity. In the December quarter, Bosch made a provision of INR 470 million for restructuring operations in the emerging electro-mobility business.
The company's board on Tuesday approved the transfer of the India business of the video, access and intrusion, and communication systems to Keenfinity India, a subsidiary of Bosch Security Systems B.V. Nederland. The transfer will take place for a sum of INR 5.95 billion, the company said in the earnings press release.
The management said this was a part of the Bosch Group's realignment of its building technologies products division. "You may have seen that the building (technologies) division globally has been sold to a venture capital (firm) Triton and this is an ongoing part of that sequence, and in India, we are doing it to the subsidiary of our parent who will then take it back to Triton from there."
In the December quarter, Bosch's revenue from operations went up by 6.2% on year to INR 44.66 billion, while its net profit declined 11.6% on year to INR 4.58 billion.
On Tuesday, shares of the company ended at INR 29,797.05 on the NSE, up 0.3% from the previous close. End
Edited by Saji George Titus
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