Bosch Limited registers growth of 7.1% in India

Bosch Limited registers growth of 7.1% in India
  • Net sales and income from operations grew by 7.1 percent over preceding 12 months
  • Profit After Tax (PAT) grew by 6.3 percent for the 12 months period ended March 2015
  • Net sales and income from operations declined by 3.4 percent for the quarter ended March 2015.
  • Dividend of INR 85 for 15 months period has been proposed

Note: The Company has changed its financial year from January until December to April until March. Consequent to this, the current financial year is for the period of 15 months from January 2014 until March 2015. The numbers are hence not comparable. Growth comparisons are made with the 12 months period April 2014 to March 2015 against preceding 12 months period April 2013 to March 2014.

Bosch Limited, a leading global supplier of technology and services, registered net sales and income from operations of INR 11,941 crores for the past 15 months. Profit Before Tax stands at INR 1,956 crores or 16.4 percent of net sales and income from operations. Profit After Tax stood at INR 1,338 crores or 11.2 percent of net sales and income from operations. For the 12 months period ended March 2015, the company’s income from sales and operations grew by 7.1 percent over the preceding 12 months. Profit Before Tax increased by 15.9 percent. Profit After Tax increased by 6.3 percent and stood at 10.6 percent of sales.

Positive business development across all sectors in 2014/15

Bosch’s Mobility Solutions sector grew by 7.4 percent in the 12 months period from April 2014 to March 2015 and outperformed the automotive market, which grew by 3.5 percent. Within the Mobility Solutions business, major growth was contributed by Diesel and Gasoline Systems divisions. The Diesel Systems division grew close to 10 percent attributed to the company’s localization approach in the Indian market. The Gasoline Systems registered a strong double-digit growth. “In the past year, we further expanded our market presence in the Automotive Aftermarket segment by adding around 300 new distributors to our sales network in India,” said Dr. Berns.

The business sectors beyond Mobility Solutions posted marginal growth despite challenging markets and continued tight liquidity, especially in the construction business, which affected the development of the Security Systems and Power Tools divisions. Bosch Limited’s Energy and Building Solutions (BEBS) division achieved a total installed capacity in Solar photovoltaics of 18.6 MWp since its inception in 2014. By building on its extensive network of partners and dealers, BEBS in India is expected to grow significantly in 2015 and beyond.

In view of the company’s results, the Board of Directors recommended a dividend of INR 85 per share.

Results for the quarter ended March 2015

The Company posted net sales and income from operations of INR 2,349 crores, 3.4 percent less than in the corresponding quarter of 2014. In the current quarter, Profit Before Tax (PBT) stood at INR 443 crores, 2 percent less than the year before. For the same period, Profit After Tax (PAT) stood at INR 287 crores and reduced by 11.9 percent. The reduction in profit is mainly due to higher depreciation on higher asset base and change in taxation for marketable securities. This effect has been partly offset by effective measures to control cost. Within the segment of Mobility Solutions, revenue for Gasoline Systems (GS) and Starters & Generators (SG) divisions has grown significantly. However this could not fully compensate the decrease of both Diesel Systems, which suffered from the weak tractor market and a declining Diesel-share in passenger cars, as well as Automotive Aftermarket. The weak consumer demand and suppressed liquidity in the market have put additional pressure on the company’s smaller non-Mobility Solutions segments too.

Outlook 2015: Moderate growth under challenging market conditions

“In spite of challenging market conditions, Bosch is prepared for the anticipated future growth with proactive investments for infrastructure and technology. This includes efficiency improvement packages on our products with regard to the upcoming emission legislations as well as CO2 reduction measures,” said Dr. Steffen Berns, managing director Bosch Ltd. “The market performance of the coming quarters will be determined by factors such as monsoon, fuel prices, interest rates and speed of execution of government reforms. We expect moderate growth in the automotive industry and remain cautiously optimistic about the Indian market this year,” he added.

Continuous investment: Opening of new manufacturing locations

During the period under review Bosch Limited saw the setting up of three new plants: Bidadi (Diesel Systems), Gangaikondan (Gasoline Systems) and Chennai (Power Tools). Bosch Limited’s Bidadi plant is scheduled for inauguration in the third quarter of 2015. Bosch Limited’s Power Tool’s plant in Chennai is designed to support a wide range of products for the Indian market. Overall the company made Capital investments of around INR 500 crores in 2014 and plans a further investment of around INR 650 crores in 2015.

Bosch Limited CSR to focus on three thrust areas

Bosch Limited has instituted a Board of Directors committee to oversee the company’s corporate social responsibility (CSR) initiatives. The thrust areas of Bosch Limited CSR include child-health, -hygiene and -education, vocational training focused on employability skills, and neighborhood projects as per the local needs identified by company’s plants and offices. Bosch Limited’s Child Health Development Program has scaled up since its start in 2010, today addressing around 26,000 students from 125 Government schools. Another notable initiative of the Company is a two months long employable skill program. The program is being organized in more than 50 centers in the country including 25 Industrial Training Institutes (ITIs) in Karnataka and so far led to employment of over 1500 youth. Over the past few years, the Company has set-up six reverse osmosis plants to provide clean drinking water; the model has currently become self-sustained, supporting over 2,400 families.

Bosch Group global business outlook for 2015

The Bosch Group expects global sales to grow within an exchange rate-adjusted range of 3 to 5 percent in 2015. Speaking at the company’s recent annual press conference in Germany, the Bosch CEO Volkmar Denner said: “Our economic and technological strength in established business fields is enabling us to tap into new market segments.” Web-enabled products and internet-based services are one of the focal points of the company’s future business. “We are driving connectivity forward in all our business sectors and playing an active role in shaping it,” Denner added. In 2014, Bosch launched many new products and connected solutions, including software solutions for smart heating systems and buildings as well as for connected industry and connected mobility. With the complete acquisitions of BSH Hausgeräte GmbH and Robert Bosch Automotive Steering GmbH, Bosch has strengthened its position in the fields of smart homes and automated driving.

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