31 March 2021
C
orner
O
ffice
Interaction with the CEO
the
Outlook improves, to reach FY19 revenue levels in FY22
EVs: Good presence in 2Ws/PVs | PLI opportunity attractive, but awaits clarity
We hosted the senior management of Bosch. Our meeting with Mr. Soumitra Bhattachrya,
MD, Bosch, and Regional President, Bosch Group India, included discussions on the business,
its preparedness for technological disruptions, and the PLI opportunity.
Bosch Limited
Demand recovery better than originally estimated:
The outlook
has improved from
initial expectations as the recovery has been better. It expects FY22 revenue to be
Mr. Soumitra
similar to FY19 levels. Depending on the level of economic activity (high case
Bhattacharya,
assumes 11% GDP growth in CY21 and 8.5% in a low case), it expects growth in CY21
MD, Bosch, and Regional
as follows: a) PVs 25%/35% (low/high case), b) M&HCV: 87%/106%, c) LCVs:
President, Bosch Group
46%/54%, d) Tractors: 2%/19%, e) 2Ws: 21%/27% and f) 3Ws: 9%/25%. It forecasts
in India
M&HCV volumes to reach near previous peak levels in FY23, with volumes crossing
~400k units (v/s FY19 peak of ~444k units).
Mr. Bhattacharya has been
EVs – BOS supplies to relevant 2Ws, PVs models:
BOS expects electrification to
associated with the Bosch
Group for more than 24
start with 2Ws/3Ws and has relevant solutions for e-2Ws, e-3Ws, and e-LCVs. It is
years. A Chartered
already supplying to: a) Bajaj Chetak (drive, battery, ECU, connectivity box, and
Accountant by profession,
App/Cloud services), b) TVS iQube (ECU and in-hub drive system), and c) Tata
over the years he has
Nexon. For M&HCVs, it expects fuel cells to be relevant solution and is globally
handled varied roles across
strong in this technology. For EVs, the parent had a total upfront investment of
the group in India and
EUR5b and invested EUR700m in CY21. It has won 90 projects and orders worth
overseas. He was the CFO of
EUR7.5b.
Bosch India from CY11 till
PLI scheme seems attractive, but details awaited:
Of the four PLI schemes for Auto,
CY18. In CY16, he took over
BOS would benefit from three of them (excluding the OEM scheme). The group, it
as CEO. Prior to joining
indicated, can claim up to USD1b under this scheme. It will work on these schemes
Bosch, he worked at the
once the final details are out.
Tata group where he was
Other takeaways
the founding member of the
Supply chain challenges more widespread beyond semi-conductors:
The semi-
Tanishq brand for Titan
conductor issue is impacting the EU, US, China, and Japan more than India.
Company. He also worked
While the semi-conductor issue is well known, supply chains are under pressure
at INDAL, the core
aluminum business of the
globally due to a shortage of steel, plastics, rare earths, etc.
ALCAN group, and was a
100% subsidiary to offer manufacturing as a service:
Its 100% subsidiary,
founding member of its
Robert Bosch India Manufacturing, would offer manufacturing as a service in
electronics business
the Automotive segment for both external customers as well as group
companies.
Margin to see steady improvement based on mix improvement/content increase, restructuring/reskilling,
and cost controls.
BS-VI confirmatory factors are ahead of regulatory norms, with 9%/70% of projects confirming to the factor
of 2.1/1.43.
th
Its smart campus (75 acres) in the heart of Bengaluru will be operational in Jun’22, its 100 year in India. It
has invested INR8b on this smart campus and would house the second highest number of Bosch employees
in the world.
Jinesh Gandhi – Research Analyst
(Jinesh@MotilalOswal.com)
Research Analyst: Vipul Agrawal
(Vipul.Agrawal@MotilalOswal.com) |
Aniket Desai
(Aniket Desai@MotilalOswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.