Buy Bosch India: Goldman Sachs Top picks

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Automobiles: Bosch India (BOSH.BO, Buy, on Conviction List)
• differentiation Strong technology differentiation, leading to top-quartile cash returns and high stability in margins across the cycle.
• Step-up in growth and returns driven by demand - 27% CY09-12E EPS CAGR (avg. CROCI 28%) Versus 3% CY06-09 EPS CAGR (avg.
CROCI 24%).
• Valuation below historical averages on P/E, P/B and EV/GCI, vs Indian auto coverage trading near upcycle multiples and MSCI India at 1
standard deviation above its historical average.


Bosch India
> About 75% market share in Fuel Injection space, track record of industry-shaping innovations.
> Higher resilience in margins drives stability in earnings, lower volatility in P/E and stock price.
Bosch has 75% share of the fuel injections (FI) equipment market… ...
> Trading close to trough premium to MSCI India, close to historical average on EV/EBITDA and EV/GCI