Bosch Ltd. share price target

Given near-term weak demand outlook and transition phase of BS-VI, we maintain our HOLD rating on the stock with a roll forward price of Rs. 15,314 based on 25x FY22E adj. EPS. Revenue improves sequentially, down YoY Total revenue decreased to Rs. 2,537cr in Q3FY20 (down 15.7% YoY) due to weaker demand from OEM's and structural changes due to BS-VI transition. Automotive products segment revenues fell 15.5% YoY to Rs. 2,143cr and revenue from others division declined 19.7% YoY to Rs. 408cr. Mobility business sector decreased 25.8%...

There is no end in sight as the near-term weak demand environment would be followed by BS6 transition, posing a risk of further market share loss in CVs and a decline in market of PV diesel, though 2W EFIs would dilute the impact. We downgrade our EPS estimate by ~5% for FY21 to factor in the emerging insights on BS6 competitive positioning. For 9MFY20, revenue/EBITDA/PAT The companys domestic revenue decline was much steeper than the underlying industry decline (-25% v/s -11% YoY), primarily led by M&HCVs.; Gross margin improved ~290bp YoY (+330bp QoQ) due to higher service income, cost reduction and inventory changes. Near- term weak demand environment/BS6 transition pose risk to our earnings with TP of ~INR15,150 (~30x Dec21E EPS). We estimate ~11%/16%/11% revenue/EBITDA/PAT CAGR, though changing competitive positioning poses risk to our estimates. Near-term weak demand environment and BS6 transition pose risk to our earnings estimates.

Its endeavor is to offer lowest cost solutions (not just components) relevant to Indian OEMs by leveraging its global supply chain and India operations. For electronic fuel injection (EFI) system, BOS has relations and contracts with key players. BOS has solutions for the entire spectrum of hybrid from P0 to P4 level. Globally, Bosch has covered substantial grounds on e-mobility and has solutions across the spectrum e-motors (48v to 400v), converter, inverter, electronic EV adoption would entirely depend on total cost of ownership (TCOs), distance travelled on daily basis and infrastructure. It already has strong positioning in the China EV market (for 2Ws and PVs) and Since 2018, its parent has won orders worth EUR13b globally in the e-mobility While the BS6 transition poses risk of further market share loss in CVs as well as continuous decline in its stronghold PV diesel, 2W opportunity should open up for BOS (one of the 3-4 players in 2W EFIs).

Revenue decreased to Rs. 2,779cr in Q1FY20 (-16.5% YoY). Revenue from automotive products was down 13.5% YoY to Rs. 2,360cr (contributing ~85.0% to total segment revenue) and others division reported revenue of Rs. 424cr, a decline of 13.1% YoY (contributing ~15.0% to total segment revenue) in Q1FY20. Domestic sales declined 18.2% YoY, while exports declined by 8.6%. Drop in revenue is primarily because of weak condition in the Indian auto market, which was further affected by the liquidity crunch in India's banking sector. Bosch Limited reported 21.7% YoY decrease in EBITDA in Q1FY20 to reach Rs. 582cr. EBITDA margin declined 140bps YoY to 20.9%...

Bosch has an established leadership in diesel technology (starter motors, common rail systems), with market share in gasoline fuel injection systems lower courtesy its late entry into that space. With BS-VI rollout, lower capacity diesel engines are expected to migrate to gasoline given the prohibitive price increase in the former would further exacerbate existing cost difference between the two technologies. While diesel is seen remaining the dominant fuel choice among UVs, larger engine capacity passenger cars, tractors and the CV space, Bosch's addressable market is...

Migration away from diesel to hurt powertrain division! Implementation of new emission norms i.e. BS-VI from April 2020 onwards is set to change the fuel preference landscape in the passenger vehicle space. The quantum of cost increase necessitated by introduction of new technology is expected to be higher for diesel vehicles compared to petrol vehicles, thus further exacerbating the existing initial cost difference between the two. For the smaller passenger car models, in particular, this cost increase is seen as being prohibitive from a demand perspective. The...

310bp YoY to 18.8% (our est. 19.8%) impacted by negative operating leverage. Lower tax restricted the decline in PAT to 17% YoY at INR4.1b (our est. INR4.4b). In FY19, Revenue/EBITDA/PAT grew 5%/3.4%/11.5%. Concall highlights: (a) FY20 outlook cautious due to BS6 transition, but growth expected from 2HFY20. It expects OEMs to stop manufacturing BS4 vehicles latest by end-3QFY20. (b) Aftermarket business grew 8-10% in CY18, but, 1QCY19 growth was muted. (c) BOS has ~33% market share in the gasoline business; it is growing in line with industry. (d) Capex: ~INR6b in...

Bosch reported mixed Q3FY19 results. Revenues came in at | 3,096 crore (up 0.8% YoY). Gross revenues from the automotive segment (~80% of revenue) were flat YoY at | 2,537 crore, with the Powertrain Solutions business declining 2.7% YoY and the aftermarket division growing 5.8% YoY Gross revenue from the Non-automotive segment increased 4.8%...

Revenues came in at | 3,201 crore (up 13.8% YoY), below our estimate of | 3,263 crore. Gross revenue from automotive segment grew 13.5% YoY to | 2,748 crore supported by Powertrain solutions & aftermarket division (grew 20.9% YoY) while revenue from the non-automotive segment grew 16.3% YoY to | 463 crore primarily supported by energy and power tool business division EBITDA margins came in at 18.6% (up 56 bps YoY) vs. our estimate of 19.1% mainly supported by lower other expense & employee...

5 November 2018 Revenues grew +14% YoY (flat QoQ) to INR32b (our est. Auto revenue grew 12.3% YoY, whereas non- auto segment grew 14.3% YoY (driven by energy and power tools business). Domestic revenue grew 16% YoY, while exports declined by 14% YoY. EBITDA grew 17% YoY (-5% QoQ) to INR6b (in-line). EBITDA margin contracted 90bp QoQ (+60bp YoY) to 18.6% (v/s est. 19.7%), as RM cost was higher at 56.7% (+230bp QoQ), impacted by adverse forex and additional cost of importing fuel injectors. Lower depreciation and higher other income boosted PAT growth of 19% YoY to INR4.2b (v/s est.