Summary Links:
* Summaries created by AI. Please verify by checking the actual call transcript.
Bosch Limited Q1 FY '24/'25 Conference Call Summary
Conference Call Details • Date: August 8, 2024 • Host: B&K Securities • Management Team: • Mr. Guruprasad Mudlapur (Managing Director & CTO) • Ms. Karin Gilges (CFO) • Moderator: Mr. Annamalai Jayaraj • Format: Listen-only mode until management presentation and Q&A
Macroeconomic Overview • Global Trends: Slowing growth in developed markets; strong U.S. economy. • Emerging Markets: Mixed results; growth in India, Indonesia, and the Philippines; sluggish growth in China. • Indian Government Focus: Infrastructure and job creation, especially in the automotive sector.
Automotive Market Performance • Q1 FY '25 Growth: • Passenger vehicles: +6% • 2-wheelers: +20% • Heavy commercial vehicles: modest growth • Light commercial vehicles: -3% • Tractors: slight growth due to favorable monsoon • Overall Sentiment: Positive outlook with moderate growth expectations.
Financial Highlights • Revenue Growth: 3.8% to INR 43,168 million • EBITDA Increase: 11.1% • Mobility Business Growth: 4.1% driven by aftermarket demand. • Hydrogen Engines: Emphasis on development as a zero-emission alternative.
Sector Developments • Aftermarket Solutions: Launch of Adicare extended warranty for diesel and rotating machines. • Power Tools Transition: Bosch Power Tools India now operates as an independent region. • Product Expansion: Focus on cordless tools and new portable speakers in Building Technologies.
Q&A Session Insights • Power Tools Strategy: India as a standalone region; no immediate local manufacturing plans. • Exports and Imports: Anticipated tripling of exports and doubling of imports due to production scaling. • Gross Margins: Localization emphasized for margin improvement amidst commodity price fluctuations. • Capital Expenditure: Investments to support localization efforts; cautious approach to manufacturing.
Future Outlook • TREM V Norms: Expected rollout by Q2 2026. • Localization Timing: Critical to avoid negative margin impacts. • EV and Hybrid Market: Prepared for growth in both sectors; focus on engine management systems.
Closing Remarks • Gratitude Expressed: Thanks to participants for their questions and insights. • Concluding Statements: Positive outlook for Bosch's future and continued engagement with stakeholders.
Bosch Limited Compliance Notice
• Submission Details • Compliance notice submitted to BSE and NSE. • Date: May 31, 2024. • Signed by: V. Srinivasan, Company Secretary & Compliance Officer. • Conference call held on May 27, 2024, featuring management.
Macroeconomic Overview
• Global and Indian Growth Projections • Global growth projected at 3.1% for 2024. • Indian economy expected to grow at 6.5% due to strong domestic demand.
• Automotive Market Insights • Vehicle production (excluding two-wheelers) increased by 5% in FY '23-'24. • Mixed results in Q4 FY '24: • Passenger cars and two-wheelers grew. • Commercial vehicles stagnated; tractor sales declined by 15%.
Financial Performance
• Q1 FY '24 Results • Revenue growth of 4.2%. • Profit after tax increased by 41.4%. • Power Solutions division sales surged by 10.9%.
Business Divisions Performance
• Mobility and Powersports • Two-wheeler and Powersports division reported 19.2% sales growth. • Mobility aftermarket division grew by 10.2%.
• Beyond Mobility Sector • Sales increase: • Power Tools: 15.8% • Building Technologies: 17%
Sustainability and Corporate Responsibility
• Commitment to ESG • Improved ESG rating. • Contributions to corporate social responsibility through training and community support.
Q&A Highlights
• Business Strategy • Separation of OE/OES diagnostic business explained. • Focus on hybrid technology and localization efforts discussed.
• Financial Concerns • Low gross margins addressed; localization expected to improve margins. • Related party transactions and capital allocation feedback noted.
Future Outlook
• Portfolio Restructuring • Ongoing efforts to focus on growth areas and divest smaller segments. • New facility for localizing commercial vehicle components ramping up.
• Regulatory Changes • Upcoming regulations like TREM V emissions standard and OBD 2.2 for two-wheelers discussed.
• Capital Expenditure • Expected capex range: INR 300-600 crores annually. • Positive outlook on performance despite potential slow start in FY '23-'24.
Disclosure Details • Date of disclosure: February 16, 2024 • Conference call date: February 13, 2024 • Focus: Financial results for Q3 FY '24 and nine months ending December 31, 2023 • Management team: • Mr. Guruprasad Mudlapur (Managing Director & CTO) • Ms. Karin Gilges (CFO) • Moderator: Mr. Annamalai Jayaraj (Batlivala & Karani Securities)
Macroeconomic Overview • Global growth projected at 3.1% for 2024 • Indian economy expected to grow at 6.5%, driven by domestic demand • Automotive market: • Overall volumes up 4% year-on-year (excluding two-wheelers) • Two-wheeler segment increased by 19% • Tractor volumes down 13% due to uneven rainfall
Financial Performance • Revenue increase: 14.9% for Q3 FY '24 • Operating profit growth: 56.1% • Profit after tax: INR 5,181 million • Interim dividend declared: INR 205 per share • Advancements in fuel cell technology highlighted
Mobility Innovations • Showcase at Bharat Mobility Global Expo: • Hydrogen engine demo truck • Connected vehicles with Advanced Driver Assistance Systems (ADAS) • Solutions for electrification in various vehicle segments • Recognition: Fourth consecutive Great Place to Work certification
Key Inquiries and Responses • Traded Goods Decline: Linked to localization efforts; share of localized goods increased from 51% to 55%. • Project House Mobility Solutions: Sale reduced expenses by INR 470 million; minimal revenue during investment phase. • Electrification Efforts: Active participation in electric two-wheelers; cautious approach to passenger car electrification. • Trem-V Norms for Tractors: Expected implementation in 2026; company prepared for compliance. • Medium and Heavy Commercial Vehicle Outlook: Moderate growth expected; flat to slight growth projected.
Other Financial Insights • Fluctuations in Other Expenses: Influenced by customer projects, warranty expenses, and revaluation of payables. • Hydrogen ICE Technology: Requires redesign for safety and efficiency; different landscape for electrification in India compared to advanced economies. • Production-Linked Incentive (PLI) Scheme: Bosch qualified, but disbursements pending audits.
Future Outlook • Hydrogen truck project: Technology provided to OEMs; pilot projects anticipated within the next year. • Market challenges: Global economic headwinds and election-related uncertainties may impact growth. Bosch committed to managing these challenges effectively.
Bosch Limited Investor Conference Call Summary
Disclosure Details • Date of disclosure: November 13, 2023 • Conference call date: November 9, 2023 • Focus: Financial results for Q2 and half-year ending September 30, 2023 • Management present: • Mr. Guruprasad Mudlapur (Managing Director and CTO) • Mr. Sandeep (Joint Managing Director) • Ms. Karin Gilges (Chief Financial Officer) • Moderator: Mr. Annamalai Jayaraj from B&K Securities
Macroeconomic Overview • Projected global growth: 3% for 2023 • India's economic growth: 6% to 6.5% • Mixed results in automotive market: • Growth in passenger vehicles, three-wheelers, and commercial vehicles • Decline in two-wheelers and tractors • Strong demand for medium and heavy commercial vehicles
Financial Performance • Revenue growth: 12.8%, reaching INR 41,301 million • Mobility Solutions growth: 11.7% • Significant profit increase due to sale of Project House Mobility Solutions business
Corporate Social Responsibility (CSR) Activities • Over 8,000 volunteer hours since April 2023 • 2,750 volunteer hours in Q2 across 40 activities • Expectation to exceed 100 activities by December 2023
Key Inquiries and Responses • Electric Vehicle (EV) Market: Recovery noted in two-wheelers post-subsidy cuts. • Gross Margin Concerns: Deterioration despite favorable commodity prices; mid-term improvements expected through localization. • Localization of EGT Components: Commitment to localizing, though 100% may not be feasible. • Production-Linked Incentive (PLI) Scheme: Bosch qualifies and plans for local manufacturing. • Impact of Business Sale: Sale will not significantly affect revenue but will be a one-time expense.
Sector Insights • Commercial Vehicle Sector: Slow recovery noted; influenced by infrastructure investments. • Contribution Margins and Capex: Rising logistics and energy costs affecting margins; significant mid-term investment needed for localization.
Future Strategies • Strong cash position post-sale; focus on organic and inorganic growth in electrification and hydrogen technologies. • Innovations from EICMA 2023 being explored for Indian market applicability.
Technology Roadmap • Pursuing hydrogen ICE and electrification technologies without prioritization. • Capital expenditure plans for 2024 include investments in emerging technologies.
Conclusion • The call concluded with gratitude to participants and management, emphasizing ongoing efforts in localization and technology adaptation.
Date and Context • Date of Call: August 1, 2023 • Disclosure Submitted: August 2, 2023 • Focus: Financial results for the quarter ending June 30, 2023
Leadership Team • Participants: • Managing Director: Guruprasad Mudlapur • Joint Managing Director: N. Sandeep • CFO: Karin Gilges
Macroeconomic Insights • Global Growth: Projected at 3% • Indian Economy Growth: Projected at 6.1% for FY23-24
Financial Performance • Revenue: Increased by 17.3% to Rs. 41,584 million • Profit Before Tax: Rose to Rs. 5,325 million (up from Rs. 4,377 million) • Profit After Tax: Rs. 4,090 million with a 9.8% margin
Q&A Highlights • Export Opportunities: Focus on spark plugs and ICE components; relocation of production from Russia to India confirmed. • Electric Vehicle Strategy: Aligning global eAxle portfolio with local needs; process acknowledged as time-consuming. • Margin Outlook: Current margins stabilizing around 11-12%; focus on localization due to BS-6 regulations. • Project House Mobility Solutions Sale: Driven by need for global scale and capital infusion; sold to parent company.
Sector-Specific Insights • Diesel and Hydrogen Technologies: Established competence in diesel with overlap in hydrogen systems. • Two-Wheeler Market: Focus on in-hub motors and motor control units; premium segment growth noted. • CAPEX Plans: Approximately 4.9 billion planned for the current year.
Additional Discussions • Artificial Intelligence: Emphasized for enhancing productivity in services and products. • Interest Costs: High costs attributed to GST payables and other charges. • Employee Costs: Expected to stabilize around 8% for the financial year.
Conclusion • Bosch Limited remains optimistic about future margin improvements, contingent on product mix and operational strategies.
Disclosure Details • Date of disclosure: May 16, 2023 • Conference call date: May 11, 2023 • Discussed financial results for the quarter and year ending March 31, 2023 • Key executives present: • Soumitra Bhattacharya (Managing Director) • Guruprasad Mudlapur (Joint Managing Director) • Karin Gilges (CFO)
Macroeconomic Insights • Global economic slowdown with IMF forecasting 2.8% growth for 2023 • India expected to grow between 5.9% and 6.5% • Automotive market showed robust performance: • 22% increase in production (excluding two-wheelers) for FY22-23 • 14% year-on-year growth in Q4 FY23 • Bosch outperformed the automotive market through market share gains
Financial Performance Highlights • Significant growth in various business segments compared to Q1 2022: • Mobility Solutions: ~24% growth • Powertrain products: 28% growth • Automotive aftermarket: 15% quarter-on-quarter growth • Two-Wheeler business: 18% growth • Overall revenue from operations: 40,634 million (23% increase year-on-year) • Operating profits grew by 14.3% • Profit before tax (PBT): 5,331 million • Profit after tax (PAT): 3,990 million (slight decline in PAT margin)
Regulatory and ESG Performance • Successfully implemented BS-VI Stage-2 norms for vehicle emissions • Ranked #1 among auto component companies for strong ESG performance • Leadership transition planned with confidence in future management
Semiconductor Supply Chain Challenges • Improved situation compared to FY22-23, but challenges remain • Growth driven by increased content per vehicle despite customer segment slowdown • No specific guidance for FY24, but expectation of healthy growth
Manufacturing and Market Strategy • Selective in-house production vs. third-party sourcing for EGT components • Increase in vehicle content linked to legislative changes and technology evolution • Strong performance indicated by highest-ever acquisitions
Localization and Technology • Importance of timing for localization in vehicle content • Strategic advantage from collaboration with Bosch Global Software Private Limited • Shift towards standardized domain architectures in vehicles noted
Concluding Remarks • Soumitra Bhattacharya expressed gratitude to participants and management • Acknowledgment of potential inaccuracies in the transcript
Communication Overview • Date of Communication: February 17, 2023 • Platforms: BSE and NSE • Transcript Availability: Published on the company's website • Key Personnel: • Soumitra Bhattacharya (Managing Director) • Guruprasad Mudlapur (Joint Managing Director) • Karin Gilges (CFO) • Moderated by Annamalai Jayaraj (B&K Securities)
Financial Results • Quarter Ending: December 31, 2022 • Revenue Increase: 17.7% • Automotive Sales Growth: 21.2% • Operating Profit: INR 2,954 million • Profit Before Tax: INR 4,276 million • Profit After Tax: INR 3,189 million • Aftermarket Business: Achieved record turnover
Macroeconomic Insights • Global Economic Risks: High inflation impacting growth • India's GDP Growth Projections: • FY '23: 6.6%-6.8% • FY '24: 5.5%-6% • Automotive Market Trends: • 17% year-on-year production increase • Passenger car segment growth: 21% • Challenges in semiconductor supply chains
Strategic Initiatives • Geographic Focus: Sri Lanka, Bangladesh, Nepal • Zing+ Strategy: Enhancing customer experience • Hydrogen Initiatives: • Partnership for hydrogen tank systems • Hydrogen engine test facility in Bangalore • Development of H2 engine-powered demonstrator vehicle
Workplace Culture • Trust Index Improvement: From 67 (2020) to 79 (2022) • Culture Audit Score: Improved from 3 to 4 out of 5 since 2019
Market Position and Technology • Gasoline Portfolio: • Diesel market share decline from 48% to 18% • Gasoline division revenue growth from 2,800 crores to 3,600 crores • Electric Vehicle (EV) Market: • Active supply of EV components • Focus on localization to meet local norms
Localization and Strategic Focus • Three-Pronged Approach: • Focus on core ICE technologies • Advancing new technologies • Emphasizing electrification and hydrogen projects • CAPEX Spending: Ranges from 300 to 600 crores based on needs
Future Outlook • Medium-Term Business Outlook: • Tailwinds: Favorable market conditions in India • Headwinds: Global economic slowdowns, supply chain challenges • Raw Material Costs: Decreased from 66.8% to 2.9% of total revenue
Conclusion • Bosch Limited remains optimistic about growth opportunities in the Indian market while addressing challenges in the automotive sector and supply chains.