Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Fine print
Bosch’s 2010 annual report showcases a stellar performance, led by 52%
growth in the key diesel segment and continuing momentum in other
product lines. Strong top line growth was accompanied by operating
leverage driven margin expansion. Return ratios recovered after declines
in 2008-09 as capacity utilisation improved. Whilst capex more than
doubled to Rs3bn, working capital remained under control and FCF was
strong. Looking ahead, the slowdown in CV sales will cause growth to
moderate in 2011 although return ratios should remain stable. Valuations
remain rich at 19x CY12PE – a premium to long term average and peers.
2010: healthy growth and margin expansion
Bosch’s 2010 annual report highlights the recovery seen in the company’s
businesses following the tepid top line performance in 2008-09. Diesel system
sales grew by 52% while the nascent gasoline business grew 61% and
aftermarket automotive 24%. Non-auto sales grew at 24% and contributed
9% of overall revenues (11% in 2009). The healthy top line performance was
accompanied by a recovery in Ebitda margins (+240bps) following two years
of decline as rising capacity utilisation drove a decline in operating cost ratios.
Return ratios recover, investments pick up
Bosch also saw a sharp recovery in asset efficiency as capacity utilisation
increased in 2010. This drove a 5% expansion in ROE to 23% despite the
drag from the continuing high cash and investments holding (Rs29bn at the
year end, 72% of net worth). Adjusting for this cash holding and associated
investment income, ROE would have been over 70%. Capex during the year
more than doubled to Rs3bn. Looking ahead, the company expects capex of
~Rs4.5-5bn/year. The working capital situation remained stable with net
working capital at 29 (27 in 2009) although the mix shifted somewhat with
current liabilities in particular seeing an uptick (69 days vs 61 in 2009).
Looking ahead
We expect Bosch to see a moderation in its performance as a slowdown in
commercial vehicle sales dents growth in the key diesel systems segment.
Gasoline revenues will continue to grow, albeit on a small base. Capex will
pick up further this year with investments in major auto segments as well as
power tools. This, coupled with moderating growth, will limit further
improvements in capital efficiency for the time being. Bosch trades at 19x
CY12 PE (a premium to its long term average and peer group), leaving limited
rerating potential and downside risks in the near term from disappointing
performance in the CV segment.
Bosch 2010 annual report comments
Topic Comment
Diesel systems
Diesel Systems business grew by a significant 51.9%
in the year 2010, recording an all time high sales…. driven
primarily by the robust demand in the Medium / Heavy
Commercial Vehicle and Tractor segments.
Gasoline
Gasoline Systems business achieved a growth of 60.9% in
the year 2010 …. development of Engine Management
Systems for two wheelers and Low Priced Vehicles
Auto aftermarket
The Automotive Aftermarket business grew by 24% in 2010
… primarily on account of expansion of product and customer
portfolio, widened distribution network, effective channel
management and innovative customer binding programmes.
Car service
Bosch Car Service added over 130stations across the country
during the year 2010, ending up with over 500 stations.
Industrial equipment
The Industrial Equipment division posted a positive growth of
6% in the year 2010 after a de-growth in the previous year
Others
Power Tools business grew by 28.3% while the Security
Technology business grew by 19.8%
Capex
Capital investment during 2010 was higher than previous
year, at Rs.3,021 mio. as against Rs. 1,446 mio. in 2009.
Outlook
In the automotive market, the prognosis for 2011 does not
seem to be as bullish as the market is expected to grow at a
more moderate pace due to higher base effect of 2010.
Low price opportunity
The Low Priced Vehicle (LPV) segment has evolved to
become one of the most important growth segments both in
the passenger car and commercial vehicles sector
Other businesses opportunity
Our non-automotive businesses are also pitched to grow in
the backdrop of committed focus and spending in
infrastructure related projects, especially metro rail projects.
Staffing
The Company continued its emphasis on employee training
and development … Wage settlements were signed with
Union at four plants. HR remuneration policies and service
conditions for officers were also modified … Attrition
continues to be well below market levels.
Risk – input costs and inflation
Whilst the Company continues to pursue cost reduction
initiatives, increase in price of input materials could impact
the Company's profitability to the extent that the same are
not absorbed by the market through price increases and/or
could have a negative impact on the demand.
Risk - competition
We are operating in a highly competitive market which may
exerts pressure both on the top line as bottom line
Source: CLSA Asia-Pacific Markets, Companny
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Fine print
Bosch’s 2010 annual report showcases a stellar performance, led by 52%
growth in the key diesel segment and continuing momentum in other
product lines. Strong top line growth was accompanied by operating
leverage driven margin expansion. Return ratios recovered after declines
in 2008-09 as capacity utilisation improved. Whilst capex more than
doubled to Rs3bn, working capital remained under control and FCF was
strong. Looking ahead, the slowdown in CV sales will cause growth to
moderate in 2011 although return ratios should remain stable. Valuations
remain rich at 19x CY12PE – a premium to long term average and peers.
2010: healthy growth and margin expansion
Bosch’s 2010 annual report highlights the recovery seen in the company’s
businesses following the tepid top line performance in 2008-09. Diesel system
sales grew by 52% while the nascent gasoline business grew 61% and
aftermarket automotive 24%. Non-auto sales grew at 24% and contributed
9% of overall revenues (11% in 2009). The healthy top line performance was
accompanied by a recovery in Ebitda margins (+240bps) following two years
of decline as rising capacity utilisation drove a decline in operating cost ratios.
Return ratios recover, investments pick up
Bosch also saw a sharp recovery in asset efficiency as capacity utilisation
increased in 2010. This drove a 5% expansion in ROE to 23% despite the
drag from the continuing high cash and investments holding (Rs29bn at the
year end, 72% of net worth). Adjusting for this cash holding and associated
investment income, ROE would have been over 70%. Capex during the year
more than doubled to Rs3bn. Looking ahead, the company expects capex of
~Rs4.5-5bn/year. The working capital situation remained stable with net
working capital at 29 (27 in 2009) although the mix shifted somewhat with
current liabilities in particular seeing an uptick (69 days vs 61 in 2009).
Looking ahead
We expect Bosch to see a moderation in its performance as a slowdown in
commercial vehicle sales dents growth in the key diesel systems segment.
Gasoline revenues will continue to grow, albeit on a small base. Capex will
pick up further this year with investments in major auto segments as well as
power tools. This, coupled with moderating growth, will limit further
improvements in capital efficiency for the time being. Bosch trades at 19x
CY12 PE (a premium to its long term average and peer group), leaving limited
rerating potential and downside risks in the near term from disappointing
performance in the CV segment.
Bosch 2010 annual report comments
Topic Comment
Diesel systems
Diesel Systems business grew by a significant 51.9%
in the year 2010, recording an all time high sales…. driven
primarily by the robust demand in the Medium / Heavy
Commercial Vehicle and Tractor segments.
Gasoline
Gasoline Systems business achieved a growth of 60.9% in
the year 2010 …. development of Engine Management
Systems for two wheelers and Low Priced Vehicles
Auto aftermarket
The Automotive Aftermarket business grew by 24% in 2010
… primarily on account of expansion of product and customer
portfolio, widened distribution network, effective channel
management and innovative customer binding programmes.
Car service
Bosch Car Service added over 130stations across the country
during the year 2010, ending up with over 500 stations.
Industrial equipment
The Industrial Equipment division posted a positive growth of
6% in the year 2010 after a de-growth in the previous year
Others
Power Tools business grew by 28.3% while the Security
Technology business grew by 19.8%
Capex
Capital investment during 2010 was higher than previous
year, at Rs.3,021 mio. as against Rs. 1,446 mio. in 2009.
Outlook
In the automotive market, the prognosis for 2011 does not
seem to be as bullish as the market is expected to grow at a
more moderate pace due to higher base effect of 2010.
Low price opportunity
The Low Priced Vehicle (LPV) segment has evolved to
become one of the most important growth segments both in
the passenger car and commercial vehicles sector
Other businesses opportunity
Our non-automotive businesses are also pitched to grow in
the backdrop of committed focus and spending in
infrastructure related projects, especially metro rail projects.
Staffing
The Company continued its emphasis on employee training
and development … Wage settlements were signed with
Union at four plants. HR remuneration policies and service
conditions for officers were also modified … Attrition
continues to be well below market levels.
Risk – input costs and inflation
Whilst the Company continues to pursue cost reduction
initiatives, increase in price of input materials could impact
the Company's profitability to the extent that the same are
not absorbed by the market through price increases and/or
could have a negative impact on the demand.
Risk - competition
We are operating in a highly competitive market which may
exerts pressure both on the top line as bottom line
Source: CLSA Asia-Pacific Markets, Companny
No comments:
Post a Comment