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Bosch Limited Overweight
BOSH.BO, BOS IN
2QCY11 PAT at Rs.2.8B (+33% yoy) surprises,
outlook hazy
Bosch reported 2QCY11 PAT at Rs.2.8B (+33% yoy) which was above
estimates. The variance was driven by higher than anticipated operating
profits driven by healthy revenue growth (+22% yoy) as well as flat
depreciation charges yoy.
Result highlights: Revenue growth (+22%) surprised driven by good
demand for i) diesel systems (sales grew at over 20%) ii) starters /
generators (+44% yoy) iii) exports, which came in at Rs.2.7B (+26%
yoy). EBITDA Margins expanded by 50bp qoq to 16.9% as the impact of
sharp rise in commodity prices and inflationary pressure (RM cost ratio
expanded +280bp yoy) was more than compensated by aggressive cost
control measures (other expense ratio declined -290bp yoy). Further,
depreciation charge was almost flat yoy (management highlighted that
the company will capitalize expenses in 2H).
Conference call highlights: Revenue outlook: Due to the challenging
external factors (slowing economic growth in India, global growth
concerns) management foresees challenges in sustaining the same
growth momentum in the second half of this year. Currently, passenger
cars & UVs are c.20% of the company’s sales. On proposed diesel car
sales taxation: Management highlighted that diesel is the preferred fuel
option available today as it is c.30% more fuel efficient as compared to
gasoline. Further, diesel technology relating to engines (CRDi), higher
torque / thrust (turbochargers, etc.) has evolved considerably. In Europe
diesel is already 50% of car sales due to these benefits. Hence, they do
not expect OEMs in India to hold back on their proposed investments.
Capex: Management has guided for a capex spend of Rs.6B in CY11,
which will be back ended.
Our View: Given healthy profit growth in 1H, our estimates for the year
remain unchanged. While we expect Bosch to benefit from its diverse
product portfolio, growth rates are likely to moderate over 2H.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Bosch Limited Overweight
BOSH.BO, BOS IN
2QCY11 PAT at Rs.2.8B (+33% yoy) surprises,
outlook hazy
Bosch reported 2QCY11 PAT at Rs.2.8B (+33% yoy) which was above
estimates. The variance was driven by higher than anticipated operating
profits driven by healthy revenue growth (+22% yoy) as well as flat
depreciation charges yoy.
Result highlights: Revenue growth (+22%) surprised driven by good
demand for i) diesel systems (sales grew at over 20%) ii) starters /
generators (+44% yoy) iii) exports, which came in at Rs.2.7B (+26%
yoy). EBITDA Margins expanded by 50bp qoq to 16.9% as the impact of
sharp rise in commodity prices and inflationary pressure (RM cost ratio
expanded +280bp yoy) was more than compensated by aggressive cost
control measures (other expense ratio declined -290bp yoy). Further,
depreciation charge was almost flat yoy (management highlighted that
the company will capitalize expenses in 2H).
Conference call highlights: Revenue outlook: Due to the challenging
external factors (slowing economic growth in India, global growth
concerns) management foresees challenges in sustaining the same
growth momentum in the second half of this year. Currently, passenger
cars & UVs are c.20% of the company’s sales. On proposed diesel car
sales taxation: Management highlighted that diesel is the preferred fuel
option available today as it is c.30% more fuel efficient as compared to
gasoline. Further, diesel technology relating to engines (CRDi), higher
torque / thrust (turbochargers, etc.) has evolved considerably. In Europe
diesel is already 50% of car sales due to these benefits. Hence, they do
not expect OEMs in India to hold back on their proposed investments.
Capex: Management has guided for a capex spend of Rs.6B in CY11,
which will be back ended.
Our View: Given healthy profit growth in 1H, our estimates for the year
remain unchanged. While we expect Bosch to benefit from its diverse
product portfolio, growth rates are likely to moderate over 2H.
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