2026-03-23 04:22:09
Latest Post
Kiaasa Retail Ltd opens 4 retail outlets
NIS Facility Management Services Ltd receives order worth Rs. 56.01 lakhs
IndiQube Signs 1140 Seats Workspace Leasing Deal with Major GCC Client in Pune
Thomas Cook India Ltd announces the demerger of its Resorts and Resort Management business into Sterling Holiday Resorts Ltd
Vikram Solar appoints Sameer Nagpal as CEO to Lead Next Phase of Strategic Growth
Research
Bosch - 2QCY2012 Result Update - Angel Broking
Posted On : 2012-08-17 23:28:41( TIMEZONE : IST )
Bosch (BOS) reported lower-than-expected results for 2QCY2012 primarily due to raw-material cost pressures and a sharp increase in other expenditure which led to a 327bp yoy (567bp qoq) contraction in the operating margin. While rawmaterial cost pressures were on account of INR depreciation; other expenditure increased led by inflationary pressures and one time tooling cost of Rs.20cr. We have revised downwards our earnings estimates to factor in the slowdown in the automotive sector and weak exports demand coupled with margin pressure due to unfavorable currency movement. We maintain our Neutral rating on the stock.
Margin pressures impact operating performance: For 2QCY2012, BOS reported a slightly lower-than-expected top-line growth of 5.6% yoy (down 5.3% mom) to Rs.2,174cr due to sluggish growth in the commercial vehicle (CV) and tractor industry sales. The automotive segment revenues grew by a modest 5.1% yoy (down 4.4% qoq) due to flat growth in the diesel systems segment and 12% yoy decline in exports revenue. On the other hand, the non-auto segment posted a strong growth of 19.9% yoy (down 11.2% qoq) during the quarter. The EBITDA margin fell sharply by 327bp yoy (567bp qoq) to 15.1%, primarily on account of increase in raw-material expenses led by INR depreciation (~100bp impact on the margins). Further, other expenditure too increased by 200bp yoy (280bp qoq) on account of inflationary pressures and one time tooling cost of Rs.20cr (~100bp impact on EBITDA margin). Hence, the net profit posted a lower-than-expected bottom-line of Rs.247cr, witnessing a decline of 11.3% yoy (26.3% qoq).
Outlook and valuation: While we are positive on the long term prospects of BOS due to its technological leadership and strong and diversified product portfolio; we expect the near-term environment to remain challenging for the company given the slowdown in the CV and tractor industry. At Rs.8,681, BOS is fairly valued at 19.9x CY2013E earnings. Thus, we maintain our Neutral rating on the stock.
