Bosch Q1 Review - Margin Challenges Likely To Persist: ICICI Securities
BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Bosch Ltd.’s Q1 FY22 operating performance was ahead of consensus estimates as adjusted Ebitda margin fell just 176 basis points QoQ to 12.5%.
However, we believe the gross margin expansion of 250 bps QoQ to 41.1% was aided by inventorisation (unsustainable) benefit to unit costs.
Automotive revenue declined ~22% QoQ on the back of mobility division (down ~24% QoQ) while non-automotive revenue fell ~38%.
We expect growth tailwind of tractor segment to slow down in FY23 while lack of diesel growth in passenger vehicles, market share loss in medium and heavy commercial vehicle is likely to keep Bosch's growth in check.
Delayed localisation leading to higher share of imports is likely to hinder Ebitda margins expansion vis-a-vis previous cycle levels (17-19%).
Click on the attachment to read the full report:
This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.