Bosch Ltd. share price target

Bosch India’s (BOS) Q4FY25 EBITDAM of 13.2% (flat YoY) was in line with consensus estimate. Gross margin improvement of ~300bps was offset by higher other expenses.

Bosch’s (BOS) 2QFY25 performance beat our estimates owing to lower RM costs (led by lower traded goods) as BOS continued its efforts for the localization of components.

Bosch has reported inline operating performance, while bottomline missed the estimates on account of lower-than-expected other income.

Bosch India’s (BOS) Q1FY25 EBITDAM of 12% (down ~110bps QoQ) was a miss against consensus estimate of 13.7%, as other expenses increased by 280bps QoQ, although in line with past 8-quarter average.

Bosch’s (BOS) 1QFY25 performance was weak as EBITDA/PAT came in lower than expected at INR5.2b/INR4.7b (est. INR5.99b/INR5.4b).

BOS’s 4QFY24 performance was operationally weak as revenue/EBITDA
came in lower at INR42.3b/INR5.6b (est. INR45.7b/INR6.3b). However,
higher other income and lower tax led to PAT beat. The management
expects FY25 revenue growth to be similar to FY24 levels.

We maintain a Buy on the stock with a revised price target (PT) of Rs. 35,968 on expectations of rising localisation, increased content per vehicle and emerging opportunities in the alternative power-train.

Bosch India’s (BOS) Q1FY24 EBITDAM at 11.3% (down 160bps QoQ) missed consensus and our estimate of ~12.5%. This was because higher mix of traded goods pulled down GM and new business-related expenses increased other expenses, thus impacting overall profitability.

Bosch India’s (BOS) Q4FY23 EBITDA margin at 12.9% (up 185bps QoQ) missed the consensus estimate of 14.4%. This is despite delivering record revenue in Q4 amidst strong M&HCV sales, as higher need for traded goods, in order to comply with changing emission norms, impacted gross margin.

We interacted with Bosch Limited (BOS) management to understand the business outlook and strategy ahead. Following are the key takeaways: a) Gross margin decline of ~1,000-1,200bps from FY20 highs has been driven by a combination of adverse raw material costs, elevated electronic component costs, elevated freight costs and product mix changes.

Bosch India’s (BOS) Q2FY23 EBITDA margin at 11.8% (down 91bps QoQ) missed
consensus estimate of 13.4% due to increase in traded goods mix and elevated cost of sourcing of electronics, despite declining input commodity costs.