Bosch Ltd - Q2FY21 First Cut - ICICI Direct

(CMP: Rs. 11,829; MCap: Rs. 34,887 crore)

Bosch Limited reported weak Q2FY21 results. Margin recovery was limited to 11.6% while the company posted loss at PAT level amid continued significant exceptional charges related to restructuring costs.

Q2FY21 Earnings Summary

- Net standalone revenues came in at Rs. 2,479 crore (up 7.2% YoY), with automotive segment revenues up 8.9% YoY to Rs. 2,128 crore and revenues from others segment down 3% YoY to Rs. 354 crore. Within the Mobility Solutions business, revenues of 2-W and powersports products grew by double digits

- The company reported EBITDA of Rs. 288 crore (down 14.5% YoY), with corresponding margins placed at 11.6%, down 295 bps YoY. Margins were lower tracking 396 bps gross margin deterioration as well as 104 bps increase in other expenses on percentage of sales basis. Automotive EBIT loss stood at Rs. 145 crore

- Consequent reported loss at PAT level for the quarter stood at Rs. 65 crore as against profit of Rs. 103 crore in the previous year. Bosch continued to book exceptional charges towards restructuring and transformational projects amid structural and cyclical changes in the automotive sector, which for the quarter stood at Rs. 400 crore ( Rs. 597 crore in H1FY21, Rs. 717 crore in FY20)

- The company generated CFO of Rs. 318 crore in H1FY21 vs. Rs. 706 crore in H1FY20

- Bosch also announced purchase of 7.1% stake for ~Rs. 15 crore in a Bangalore based startup, 'Routematic' (Nivaata Systems Private Limited) that is engaged in urban mobility innovations

We continue to hold a cautious stance on Bosch Limited amid its muted growth prospects. Management commentary over domestic automotive recovery has been cautious in the past, with diesel as a powertrain option losing traction in PVs (ex-higher end UVs). The company's continued exceptional charges remain a drag on overall profitability and return ratios.

Shares of BOSCH LTD. was last trading in BSE at Rs.11828.75 as compared to the previous close of Rs. 12007.65. The total number of shares traded during the day was 4005 in over 1958 trades.

The stock hit an intraday high of Rs. 12250 and intraday low of 11610. The net turnover during the day was Rs. 48068784.

Source : Equity Bulls

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