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Bosch Ltd>
  • CMP : 32,327.8 Chg : -105.35 (-0.32%)
  • Target : 20,000.0 (15.61%)
  • Target Period : 12-18 Month

04 Aug 2022

Healthy performance; favourable growth environment...

About The Stock

Bosch Ltd (Bosch) is a technology leader providing solutions in automotive, industrial technology, consumer goods, energy & building technology.

  • Mobility solutions (automotive products) comprised ~85% of FY22 sales with share of Business Beyond Mobility at ~15%
  • Within mobility, it has large presence in diesel-dependent vehicles & tractors

Bosch posted healthy Q1FY23 results.

  • Total operating income grew 7% QoQ to ₹ 3,544 crore.
  • Automotive products segment grew 15% QoQ to ₹ 3,109 crore while consumer goods & others segment de-grew 30% QoQ to ₹ 439 crores.
  • EBITDA margins were lower by ~50 bps QoQ at 12.7%
  • Consequent PAT was at ₹ 334 crore in Q1FY23 vs. ₹ 351 crore in Q4FY22
What should Investors do?

Bosch’s stock price has de-grown ~6% CAGR over 5 years from ₹24,560 levels in August 2017, thereby underperforming Nifty Auto index.

  • We retain our BUY rating on the stock amid industry tailwinds in the form of healthy volume growth, diesel powertrain gaining traction domestically and incremental role to play amidst more stringent emission control norms
Target Price Valuation

We value Bosch at 32x P/E on FY24E EPS of ₹ 625 for a revised target price of ₹ 20,000 per share (earlier ₹ 16,100).

Key Triggers for future price performance
  • Leadership positioning in powertrain technology with parent supported ready solutions for Flex Fuel, BS VI phase II transition, EV’s and hybrids.
  • Amidst strong focus on increasing domestic sales with underlying focus on exports (~9-12% of sales), we build in 18.2% sales CAGR over FY22-24E
  • Resolution of semiconductor shortage to aid topline growth. Operating leverage gains seen aiding margin improvement to 14.5% by FY24E. Company aims for double digit EBIT margins amid localisation push
Alternate Stock Ideas

In the auto coverage, we also like M&M.

  • Focused on prudent capital allocation, UV differentiation & EV proactiveness


  • BUY with a target price of ₹ 1,500

Key Financial Summary

Key Financials FY19 FY20 FY21 FY22 5 year CAGR (FY17-22) FY23E FY24E 2 year CAGR (FY22-24E)
Net Sales 12,085.0 9,841.6 9,718.0 11,781.6 2.5 14,473.2 16,454.0 18.2
EBITDA 2,154.1 1,483.3 1,162.4 1,456.9 -5.8 1,777.6 2,381.2 27.8
EBITDA Margins (%) 17.8 15.1 12.0 12.4 - 12.3 14.5 -
Net Profit (adjusted) 1,598.0 1,300.0 1,115.4 1,217.1 -3.4 1,349.3 1,843.1 23.1
EPS (₹) (adjusted) 541.9 440.8 378.2 412.7 - 457.6 625.0 -
P/E (adjusted) 31.9 39.2 45.7 41.9 - 37.8 27.7 -
RoNW (%) 17.5 14.0 11.4 11.4 - 11.6 14.3 -
RoCE (%) 19.2 11.9 8.4 10.6 - 12.3 15.7 -
Source: Company, ICICI Direct Research



I/We, Shashank Kanodia, CFA, MBA (Capital Markets), and Raghvendra Goyal, CA, Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. It is also confirmed that above mentioned Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months and do not serve as an officer, director or employee of the companies mentioned in the report.

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