BOSCHLTD - Bosch Ltd Share Price

In the recent earnings call for Q1 FY '26, Bosch Limited's management provided a cautious yet optimistic outlook amid global and domestic challenges. The International Monetary Fund (IMF) revised India's growth forecast for 2025 to 6.4%, highlighting its resilience in a fragile global economy expected to grow by 3%. Management emphasized improvements in the automotive industry, particularly in markets for tractors and three-wheelers, with expectations for moderate growth in passenger vehicles despite high inventories.

Key forward-looking points included:

1. Automotive Growth: Management forecasts moderate growth in the passenger vehicle segment, driven by new model launches, while commercial vehicles are expected to show moderate single-digit growth supported by better financing and rural demand.

2. Tractors and Two-Wheelers: The tractor segment is projected to perform well due to favorable monsoon conditions and rising minimum support prices for crops. Two-wheelers are expected to reach an all-time high in FY '26, bolstered by the festive season and improved rural incomes.

3. Mobility Business Recovery: The mobility sector saw a 14.3% quarter-on-quarter growth fueled by power solutions. The overall mobility business reported revenues of Rs.47,886 million, marking a 10.9% increase over the previous year.

4. EBITDA Performance: EBITDA for this quarter stood at Rs.6,393 million, up 23% year-on-year, supported by improved margins.

5. Exports and Competitiveness: Management is optimistic about export growth, though it is contingent on competitiveness and regulatory adjustments in the international market.

6. Technological Innovation: Bosch is focusing on electrification and advanced driver assistance systems (ADAS) as major growth areas, leveraging their strong global position in these technologies.

In summary, Bosch Limited aims for steady growth, positioning itself strategically in automotive electrification and technology while navigating an evolving market landscape.

Questions and Answers from the Bosch Limited Q1 FY '26 Earnings Call

1. Question: What is the extent of localizations you have achieved in the two-wheeler business? Is it fair to assume that two-wheeler is contributing almost double-digit revenue?

   Answer: Yes, the two-wheeler segment is showing strong growth, particularly due to content related to OBD 2, localized and delivered from our Bidadi plant. While I cannot provide specific segmental revenue numbers, two-wheelers are indeed a significant contributor to our overall turnover in Mobility.

2. Question: How are customers responding to the easing of purchase goods? Will you retain the benefits or pass them on?

   Answer: We're continuing with localization, which is influenced by material costs and market demand for traded versus manufactured goods. In April-June 25, we saw a higher demand for manufactured goods, impacting material costs. Pricing for our products is generally based on existing customer contracts, so it varies per agreement.

3. Question: Regarding the MoU with Tata Electronics, how will this benefit the listed entity?

   Answer: The MoU with Tata Electronics is an early-stage exploration for semiconductor cooperation. Currently, there's no direct benefit to the listed entity, but as we progress, potential localization opportunities may arise which could be beneficial in the future.

4. Question: Can you elaborate on the restructuring of the mobility business?

   Answer: The restructuring aims to ensure commercial prudence amid technological shifts. We evaluate our balance sheet and product portfolio regularly, forming provisions for any necessary adjustments. It's about aligning resources with future technology needs for sustainability.

5. Question: What is Bosch's approach concerning the hydrogen ecosystem for commercial vehicles?

   Answer: Hydrogen technology is still in early phases. We're focused on maturing the technology and developing the necessary ecosystem components like generation, distribution, and storage. I can't provide a specific timeline for commercialization yet.

6. Question: How is Bosch adapting to the trends of electrification and electronification in the Indian market?

   Answer: We are a leading supplier of EV technology globally, including in competitive markets like China. Our strategy in India is to capture this market by offering comprehensive electrification solutions and collaborating with multiple OEMs on projects.

7. Question: Regarding the recent acquisition of the Johnson Controls-Hitachi unit, how will it integrate with Bosch India operations?

   Answer: This acquisition is a global move and is currently a separate division not within the listed entity. It will retain its operational structure for now, and we will assess changes in integration if necessary in the future.

8. Question: Can you provide insights on Bosch's export outlook and targets?

   Answer: We foresee growth in exports, particularly with our new NOx line at the Bidadi plant, which will serve international markets. While our priority remains the Indian market, we aim to maximize utilization of our production capacities for exports, although specific targets are challenging in a volatile environment.

9. Question: What impact do rare earth magnet issues have on Bosch and OEMs?

   Answer: The rare earth topic is a broader issue impacting the supply chain. We've established task forces to navigate this situation, analyzing our material inputs and working globally for solutions. While we have coverage until August, we are actively managing alternatives and mitigating risks.

These answers summarize key inquiries and responses from Bosch Limited's Q1 FY '26 earnings call while ensuring a concise capture of the dialogue.