Bosch’s revenue soars 12% with steady growth of India Auto Inc

Bosch Ltd, the Indian arm of the German technology and services major, has reported net revenue of Rs 11,690 crore in FY2018 (+12%), with net profit after tax standing at Rs 1,464 crore (+1.4%) in the last fiscal year.

The leading Tier 1 player in the component, technology and services space in the country, Bangalore-based Bosch has announced its results for FY2018 and the company is overlooking a strong performance, with net operational revenues clocking at Rs 11,690 crore (+12%).

While the company’s profit before tax (PBT) before exceptional items stood at Rs 2,134 crore, or 18.3 percent of the total revenues from operations (+1.9%), its net profit after tax (PAT) from continuing operations before exceptional items clocked at Rs 1,464 crore, an increase of 1.4 percent over the previous year.

PAT from continuing operations after exceptional items, however, decreased by 5.1 percent over the previous year. Previous year profit after tax includes profit from sale of its ‘Starter Motors and Generators Business’, which was executed on August 1, 2016.

According to Soumitra Bhattacharya, managing director, Bosch,“Bosch Limited’s domestic sales have been growing steadily as India’s automobile sector shows promising growth in the future.”

Positive growth across key sectors in FY2018
Bosch’s ‘Mobility Solutions’ business sector grew by 15 percent in FY2018, where its domestic sales increased by 14.8 percent, outperforming the domestic automotive market, which posted a growth of 10.8 percent in the same period. On the other hand, the company’s export sales grew by 16.8 percent and within the mobility solutions business, the ‘Powertrain Solutions’ business division registered a strong double-digit growth of 19.4 percent.

Even though the ‘Building Technology’, ‘Packaging Technology’ as well as ‘Thermotechnology’ divisions posted double-digit growth, the overall growth of business sectors beyond mobility solutions saw a marginal growth of 0.3 percent, offset by lower turnover in the energy business due to volatility in the market after GST implementation.

Q4 FY2018 results and strong outlook for FY2019 
For the quarter ended March 2018, the company posted total revenue from operations, which stood at Rs 3,158 crore (+22.7%) and its PBT for the quarter stood at Rs 724 crore before exceptional items (+9.2%). The increase in profit comes on the back of higher sales volumes and increased operational efficiencies offset by higher material cost due to product mix change. The mobility solutions sector posted a healthy growth of 23.1 percent.

Speaking about the outlook for the ongoing financial year, Bhattacharya said, “The automotive industry in India accounts for 7.1 percent of the country's GDP. This is expected to increase in the future as well, as India gears up to achieve BS VI implementation from April 2020 and adopt electromobility solutions built for Indian conditions. With such an optimistic market outlook, Bosch is confident of continuing its strong revenues in future.”

Beyond mobility, the company’s key focus lies on building effective solutions for a connected future. This includes using big data for energy compliant processes, deploying digital solutions to get power tools into the hands of more tradesmen and securing hubs of urban movement such as airports and metro stations with smart surveillance solutions, among other initiatives.

Rs 460 crore invested in India in FY2018
During the past 12 months, the company says that it has invested heavily towards the development of new products and at facilities of Bosch in Bidadi in Karnataka and Nashik in Maharashtra. Overall, the company made capital investments of around Rs 460 crore in FY2017-18. 

“India is a priority market for Bosch and the investment has been consistent. We will continue to make investments of similar nature in the current financial year,” Bhattacharya pointed out.

Bosch Global’s strategy for FY2019
Bosch is aiming for further growth in the ongoing calendar, despite the difficult economic climate. After achieving record results in 2017, and in light of economic and geopolitical risks, the Bosch Group expects its sales revenue to grow by 2 to 3 percent in FY2019.

In the first three months, the sales revenue generated by the company matched the high level of the same period of the previous year, and even increased by around 5 percent. Speaking at the Group’s annual press conference in Renningen, Germany, Dr Volkmar Denner, CEO, Bosch Group, said, “Our company is unparalleled when it comes to combining comprehensive connectivity expertise with broad industry and product know-how. This is the Bosch Group’s unique selling proposition.”

According to Dr Denner, the company sees improving the quality of life and contributing to eco- and climate-friendliness at the top of Bosch’s agenda.

“Our ‘Invented for life’ ethos is our motivation for developing the best possible technologies for environmental protection. We want to help keep people mobile, while improving air quality,” he added.

In the Asia-Pacific region, the Bosch Group recorded a handsome 13.5 percent increase in sales in 2017 to Euro 23.6 billion (Rs 189,541 crore). The Group’s total sales revenue in Asia Pacific has grown to now stand at 30 percent, as compared to 28 percent a year ago.