Bosch - Q4 FY20 (Audited –Cons)
Total revenue from operations 2,237 Cr
2,730 Cr (-18.03%) YoY | 2,537 Cr (-11.89%) QoQ
Year ending revenue: 9,841 Cr Vs. 12,085 Cr (-18.51%)
Net Profit of 81.1 Cr
411.7 Cr (-80.21%) YoY 190.3 Cr (-57.34%) QoQ
Year ending Net profit: 649.8 Cr Vs. 1,598 Cr (-59.33%)
EPS (in Rs.) 27.4
136.6 YoY | 64.5 QoQ
Year ending EPS: 220.3 Vs. 525.2
View: Result is above expectation and improved. Although revenue and profit both have declined but beat the market estimates. During the FY 2019-20, Bosch Limited has made a provision of INR 717 crores, towards various restructuring, reskilling and redeployment initiatives* and Q4 company has made an incremental provision of INR 297 crores, towards various restructuring, reskilling and transformational projects.
Business Updates & Highlights**:
Total revenue from operations declined by 18.6% during the FY 2019- 20 due to the slowdown in auto industry.
Bosch Limited registers 16.6% Profit Before Tax (before EI) in FY 2019-20 from continuing operations
PBT before exceptional items from continuing operations for the current quarter stood at INR 361 crores, 36.2 percent decline over the same period of previous year.
Business development in FY 2019-20 Bosch Limited’s Mobility business sector declined by 24.4 percent in 2019-20, due to slowdown in the auto segment. Domestic sales declined by 25.9 percent and export sales declined by 6.1 percent. Within the Mobility segment, the Powertrain Solutions business registered a decline of 30.2 percent owing to low performing automotive market. Business beyond Mobility solutions has recorded a decline of 14.4 percent.
Board of Directors recommended a dividend of INR 105 per share for this twelve-month period
ROE and ROCE is around INR 10.7% and 17% respectively and book value per share is around INR 3,175 and share is currently trading at 3.2x of its book value. Company is currently trading at annualized PE of around 44 which is good as per industry benchmark. Promoter holding is around 70.5% in the company which is very strong and stable. FIIs and mutual fund hold around 7.5% and 11.5% in the company. Cash and cash equivalent from operating activities as of March 2020 is around INR 1,336 Cr Vs. 593 Cr as of March 2019. The company is virtually debt free and liquidity position and debtor realization is also good which is around less than two months.
Position: Share strong support price is INR 9150/8800. Long term Investor can continue with the company with target price of INR 11,200/12500 based on their risk appetite.
Share View: Share price high 17,800 (52 week) and now 9,545. Bosch is a leading supplier of technology and services in the areas of Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology. Additionally, Bosch has, in India, the largest development center outside Germany, for end to end engineering and technology solutions. Bosch set-up its manufacturing operation in 1951, which has grown over the years to include 18 manufacturing sites, and seven development and application centers
Opportunities: Share is currently at beaten down attractive valuation and 50% discount. Bosch Group in India employs over 31,000 associates being a follow strong corporate governance model, MNC company and regular dividend paying company. Bosch develops smart mobility solutions in the areas of hardware, software, and services.
Risk: Downward trend in the automotive industry which has been going through a challenging phase for some time and is now having to deal with the impact of the coronavirus. Total revenue of Bosch Limited’s Mobility Solutions Business sector decreased by 23.7 percent in the quarter ending on March 31, 2020. Automotive technology company with 80 percent of revenues driven through mobility business, which have been affected severally.
Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions.