Bosch Ltd. share price target

Though revenue growth for BOS continued to outperform the underlying industry volume trends, revenue/EBITDA missed our estimate due to weakness in the Power Tool business. We expect this outperformance to continue on account of a CV cycle revival, higher content, and increase in exports. However, a margin recovery is still awaited. Since the CMP reflects all negatives, we see no major re-rating catalysts on the anvil. We reduce our FY22E/FY23E EPS by 9%/3% to account for lower revenue...

Bosch Limited manufactures a wide range of automotive parts. The Company'products includes fuel injection pumps, spark plugs, including nozzles and nozzle holders, elements, delivery valves, filters and filter inserts, glow plugs, starter motors, alternators and wipers. Bosch also...

Operating performance was impacted by a one-off RM cost in 2QFY22, though BOS continues to grow faster than the underlying Auto industry. We expect revenue to continue to grow faster on account of a CV cycle revival, content increase, and higher exports. However, a margin recovery is still awaited. The CMP is largely reflecting all the negatives, with no major rerating catalysts on the anvil. We maintain our FY22E EPS estimate and increase our FY23E EPS estimate by 4% to account for higher other income. We maintain our Neutral rating with a TP of INR18,250 per share....

Margin recovery awaited; hinges on localization and operating leverage Bosch (BOS)'s 1QFY22 performance was driven by higher revenues and better gross margins. We expect growth in BOS to rebound faster on account of (a) the revival of the CV cycle, (b) the addition of the 2W segment, and (c) content increase. BOS' stock price largely reflects all the negatives, but there are no major re-rating catalysts on the anvil. We upgrade our FY22/FY23E EPS by 4%, accounting for better sales growth. Maintain Neutral, with TP of INR16,650....

Fluctuating demand, disruptions in supply chains and changes in consumer behavior on the back of rising uncertainty brought upon by the second wave is expected to pose challenges in the coming months. Given this situation, managing demand and keeping cost under control remains key for Bosch. We retain our HOLD rating on the stock with rolled-forward TP of Rs. 16,162 based on 28x FY23E adj. EPS. Topline driven by demand from tractor segment Q4FY21 Consolidated revenue surged to Rs. 3,216cr (+43.8% YoY, +6.1% QoQ) on...

but margin recovery yet to happen due to higher traded content Revenue continued to grow faster than underlying industry growth in 4QFY21. While the current situation will impact demand in the near term, we expect growth to rebound faster on account of strong Tractor demand, addition of the 2W segment, and higher content. The stock price largely...

Valuation and view: The transition to BS-VI led to further market share loss in CVs as well as a continuous decline in its stronghold PV diesel, although the 2W segment has opened up for BOS (one of the 3-4 players in 2W EFI). Valuations have corrected in line with muted earnings over the last four years, dilution in its competitive positioning, as well as on concerns due to EVs. While it is too early to assess the competitive landscape in EVs, BOS is very well-prepared to leverage electrification in 2Ws. We expect it to outperform underlying industry volumes, barring the substantial divergence in segmental trends, driven by an increase in content under BS-VI as well as additional revenue from 2W EFI. The stock trades ~29.3x/25.4x FY22E/FY23E EPS. The stock price largely reflects all the negatives, but a re-rating catalyst may emerge in 2-3 quarters. We...