Bosch Ltd - Future Needs a Past; Initiating Coverage :: Edelweiss PDF link

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Results beat but best yet to come! • Bosch Ltd :: ICICI Securities, PDF link

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Bosch: Hold ::Business Line

Bosch - Buy :Business Line

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Investors with a perspective of one-to-two years can buy the shares of Bosch. The company is a major supplier of diesel and gasoline fuel injection systems for the auto industry.

Although slow domestic auto sales or a diesel price hike/deregulation may affect it in the immediate future, Bosch is on a strong wicket for three reasons.

For one, over the medium-to-long term, exposure to the diesel segment is a positive. Considering the technological progress of diesel engines and the benefits of higher mileage, the demand for diesel vehicles is on the rise.

Two, it derives about 20 per cent of revenues from the automotive after-markets, which include supply of replacement parts and servicing of vehicles.

The demand for such services is largely independent of the auto industry cycle. Three, the company is also present in the non-auto segment, helping diversification of the revenue stream.

While the stock has appreciated 27 per cent from our previous ‘Buy' call, it still trades at attractive valuations. At Rs 8,936, it trades at 19 times its estimated 2013 earnings.

This is in the lower end of the historical PE band. Investors can use the volatility in the markets to accumulate the stock on dips.

DIESEL POISED TO GROW

Bosch has over 70 per cent market share in India for diesel fuel injection products such as single/multi-cylinder pumps, distributor pumps and electronic injection control units (common rail systems). It derives more than half its revenues from supplies to diesel engines and caters to segments such as passenger cars, commercial vehicles, tractors and locomotives.

Going forward, few trends in the diesel vehicle market are expected to favour the company. First, the expanding market for diesel cars. Advances in diesel engine technology such as the use of common rails, higher thrust and lower noise levels have encouraged customers to opt for this alternative.

Moreover, diesel cars are more fuel-efficient, despite higher purchase price. Post the clarity in the budget, several auto manufacturers have decided to go ahead with planned capacity expansions for diesel cars or set up of greenfield capacities for diesel engines. To cater to the demand, Bosch is expanding its manufacturing capacities for diesel engine components.

On the commercial vehicles front, Bosch's source of support lies in the healthy demand for light vehicles (LCVs). LCV volumes grew by 27 per cent, as against the 8 per cent growth in medium and heavy vehicles (MHCVs) in 2011-12.

This shows that they are less sensitive to both cyclicality and high interest rates. Hence, the company's exposure to this segment will help keep revenues trickling even as growth in other segments remain moderate.

Expected measures from the government to boost economic growth will help MHCV volumes pick-up in the second half of the year.

SUPERIOR TECHNOLOGY

Bosch has already led the way in introducing common-rail technology for low-priced vehicles (three-wheelers and small four-wheelers) which have a sizeable demand in India.

The company also launched common rail systems for MHCVs a couple of years back. These systems improve fuel efficiency and reduce polluting emissions. The company will also benefit from the increasing usage of ABS (antilock braking system) in vehicles. It makes about three lakh ABS units per year in its Chakan facility for cars and utility vehicles.

DIVERSIFICATION BENEFITS

A diversified revenue base also adds in its favour. While starters and generators, gasoline systems and car multimedia devices (which bring in a small portion of the revenues) are linked to auto sales,

Bosch's wide distribution and service networks in the automotive after markets is a positive. In addition, the company derives about 10 per cent of its revenues from the manufacture of packaging machines, power tools and electronic security systems. These have witnessed strong growth in recent times.

FINANCIALS

For the quarter ended March 2012, net sales grew by 10 per cent to Rs 2,268 crore, while net profits rose 22 per cent to Rs 336 crore.

Operating margins came in at 20.8 per cent vis-à-vis 18.8 per cent in the same quarter last year.

Technical Query Corner: Titan, canara bank, JSW steel, Rohit Ferro, Crompton Greaves, Honeywell, Bosch, :: Business Line

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Please advise on the outlook for Bosch and Honeywell Automation India. Can I buy and hold them for long-term?

N.S. Ganesan

Bosch (Rs 9,005.9): Bosch continues to be a trail-blazer in 2012 as well. The stock is up 35 per cent so far this year.

The stock is in a strong structural uptrend since the March 2009 low. This uptrend will be threatened only if the stock goes on to close below Rs 6,425. Subsequent supports for the stock would be Rs 6,062 and Rs 5,314.

Medium-term supports for the stock are at Rs 8,164 and Rs 7,501. Investors with short- to medium-term horizon can accumulate the stock on declines as long as it trades above Rs 7,500.

Immediate target for the stock is Rs 10,162. Long-term target for the stock is at Rs 11,032.

Honeywell Automation (Rs 2,477.3): Honeywell Automation is in a long-term down move since the July 2010 peak of Rs 3,010. But this decline has halted at the key long-term support at Rs 1,663 and the stock is once again reversing from its long-term resistance band between Rs 3,000 and Rs 3,300. Investors with short-term perspective can divest their holdings when the stock nears this resistance band.

Medium-term support for the stock is at Rs 2,280 and this can serve as support for medium-term investors. Long-term support for investors is, however, at Rs 1,620. Investors need to start worrying only on a strong close below this level. Long-term target on close above Rs 3,350 is Rs 4,097.

Bosch :: 2QFY2012 Result Update :: Angel Broking

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Bosch (BOS) reported better-than-expected net profit growth for 3QCY2011, led
by healthy performance at the operating level and a significant increase in
non-operating income. Revenue growth was primarily driven by the diesel systems
and after market segments, which grew by 13% yoy each. Post 3QCY2011
results, we have revised our earnings estimates slightly upwards to factor in
better-than-expected operating margin and higher non-operating income
during the quarter. We maintain our Accumulate rating on the stock.
Strong performance boosted by higher non-operating income: BOS registered
healthy top-line growth of 16.4% yoy (down 3.3% qoq) to `1,991cr, driven by
15% yoy (down 2.7% qoq) growth in the auto segment and strong 31.5% yoy
(3.3% qoq) growth in the non-auto segment. The diesel systems and automotive
aftermarket segments grew by 13% yoy each, while the gasoline segment
recorded a 30% yoy decline in sales (due to slowdown in OEM offtake).
The company’s EBITDA margin witnessed a marginal 43bp yoy contraction to
19.3% due to higher commodity costs (mainly due to higher alloy and steel prices
and adverse currency impact) and employee expenses. Sequentially, the
company’s margin expanded by 90bp as the proportion of traded goods was
lower during the quarter. Net profit registered strong 22% yoy (3.3% qoq) growth
to `288cr as other income jumped by 111% yoy, driven by DEPB benefits. Interest
income during the quarter grew by 46% yoy due to higher yield on investments.
Outlook and valuation: We expect BOS to register a ~17% CAGR in its net sales
over CY2010-12E, leading to a ~19% CAGR in its earnings. As a result,
we estimate BOS to post EPS of `350.8 and `388.1 for CY2011E and CY2012E,
respectively. At `7,205, the stock is trading at 20.5x CY2011E and 18.6x
CY2012E earnings, respectively. We retain our Accumulate rating on the stock
with a revised target price of `7,763.

Bosch Ltd: Buy:: Business Line,

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In a scenario where the auto industry growth is moderating, due to cyclical and macro-economic factors, an investment in the Bosch stock seems a safe bet. Although a major supplier of diesel and gasoline fuel injection systems for the auto industry, the company offers a good shield in times of a slowdown.

For one, exposure to the diesel segment itself is a positive. Considering the technological progress of the diesel engines and the benefits of lower running cost and higher mileage that they bestow, demand for diesel vehicles is on the upswing.

Two, it derives about 20 per cent of revenues from the automotive after-markets which include supply of replacement parts and servicing of vehicles. The demand for such services is largely independent of the auto industry cycle. Three, the company is also present in the non-auto segment, helping diversification of the revenue stream.

Hence, notwithstanding near-term concerns due to the ongoing workers' strike and shutdown at the Bangalore plant, investors with a perspective of about two years can consider exposures to Bosch. At the current market price of Rs 7,053, it trades at a PE of about 18.5 times its estimated 2012 earnings. Considering the volatility in the broader markets, investors can also accumulate the stock on dips.

DIESEL TO DRIVE GROWTH

A pioneer in diesel technology world-wide, Bosch has over 70 per cent market share in India for diesel fuel injection products such as single/multi-cylinder pumps, distributor pumps and electronic injection control units (common rail systems). These fuel injection equipment are used to inject a particular quantity of fuel at a pre-determined time and fashion, thus influencing the performance, emission and reliability of the engine. Bosch derives more than 50 per cent of its revenues from supplies to diesel engines and caters to segments such as passenger cars, commercial vehicles, tractors and locomotives.

Going forward, few trends in the diesel vehicle market are expected to play out in favour of the company. First, the expanding market for diesel cars. Advances in diesel engine technology such as the use of common rails, higher thrust and lower noise levels has encouraged customers to opt for this alternative. Moreover, although the initial purchase price may be higher, diesel as a fuel is not only cheaper than petrol, but also more fuel-efficient. OEMs (original equipment manufacturers) too are cashing in on this trend. Maruti Suzuki, for example, which offers diesel variants in the SX4, Swift, Dzire and Ritz models, now derives one-fifths of its total sales volumes from such vehicles is expanding capacities for the same. Contribution of diesel passenger vehicles to Bosch's sales is currently between 20-25 per cent.

A second source of support for Bosch lies in the currently healthy demand for tractors and LCVs (light commercial vehicles). As against the 7 per cent growth in medium and heavy commercial vehicles (MHCVs) in April-August 2011, LCVs have grown by a robust 27.5 per cent during the same period, showing that they are less sensitive to both cyclicality as well as high interest rates. Hence, the company's exposure to this segment helps in keeping revenues trickling in even as growth in other segments moderate. Besides, given the good farm growth in the first quarter, the increased rural incomes and good monsoons, the demand for tractors too could continue to hold up.

TECHNOLOGY, ITS FORTE

A third strength of the company lies in its technological competence. Bosch has already led the way in introducing common rail technology for low-priced vehicles (small three- and four-wheelers) which have a sizeable demand in India. The company also launched common rail systems for MHCVs last year. These common rail injection systems help improve fuel efficiency and reduce polluting emissions. Another major highlight is the introduction of inline fuel injection pumps meeting BS III norms, (implemented pan-India from October 1, 2010) for medium CVs. About Rs 2,500 crore is to be invested by the Bosch group in India between 2011 and 2013, of which Rs 1,300 crore will be used by Bosch Ltd., the flagship, as investments into further technological upgradation. Over the medium-to-long term, the parent's R&D activities in hybrid technology also hold promise.

HELP FROM DIVERSIFICATION

The diesel systems might bring in a chunk of the revenues, but the company's revenue base is also quite diversified, partially acting as a shield in times of a moderation in auto industry growth. While starters and generators, gasoline systems and car multimedia devices, which bring a small portion of the revenues, might still be linked to the vagaries of auto sales, Bosch's wide distribution and service network in the automotive after markets is a positive. In addition, the company derives about 10 per cent of its revenues from the manufacture of packaging machines, power tools and electronic security systems (CCTV, fire alarms, access control systems), which have witnessed strong growth in recent times.

ROBUST FINANCIALS

Backed by good demand for diesel, starter and generator products, Bosch posted a 33 per cent growth in net profits to Rs 279 crore in the June 2011 quarter. Net sales rose by 22 per cent to Rs 2,024 crore. Operating margins stood at around 20 per cent, at the same levels seen in the year-ago period.

JPMorgan, Bosch : 2QCY11 PAT at Rs.2.8B (+33% yoy) surprises, outlook hazy

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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.

Bosch India :: Removed from Asia Pacific Conviction Buy List ::Goldman Sachs

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Removed from Asia Pacific Conviction Buy List
Bosch India (BOSH.BO)
Equity Research
Off Conviction List; retain Buy on stable top quartile cash returns
What happened
We remove Bosch India from the Conviction List following the stock’s
outperformance and increased macro headwinds. We believe the
outperformance was driven by the relatively defensive nature of Bosch India’s
technology-driven business model, amid a worsening demand cycle for
automobiles. We raise our 12 month CY11E P/E-based TP to Rs7,816 (from
Rs7,414) and revise our earnings estimates by 3%-6% for 2011E-13E, following
the positive earnings surprise in 1QCY11. Since adding it to the Conviction List
on Nov. 16, 2010  the stock is up 8% vs Sensex down 13%. In the last 12
months the stock is up 16% vs the Sensex down 5%.
Current view
Despite Bosch India’s recent outperformance, we maintain our Buy rating
on: (1) high stability in margins and cash returns across the cycle, driven
by a well-differentiated technology-driven industry position; (2) lowest
stock beta and covariance in P/E multiple relative to the sector; and (3) in
the near term, Bosch India is also likely to benefit from the relative
demand differential between petrol vs. diesel fuel-based vehicles.
In 2Q CY2011, the company reported net income of Rs2.8bn, up 18% yoy,
2% qoq and higher than our estimates by 16%, and 8% vs. Bloomberg
consensus. The surprise was mainly driven by revenue up 20% yoy, and
6% above our and 4% above consensus. Key takeaways: 1) Management
observed that demand for LCVs and tractors continues to be robust where
as for passenger cars and HCVs it seems to have peaked during the first
half of CY2011. 2) Management believes that the diesel vehicle segment
should continue to grow faster than the petrol segment due to relatively
favourable economics, and despite  any potential fuel or excise duty hikes.
3) Raw material costs increased by 250bps owing to rising metal costs,
Euro increase vs. INR rates and product mix. 4) Other income for the
quarter was higher owing to higher treasury income.
Key risks: commodity costs, worse-than-expected fuel price environment.
INVESTMENT LIST MEMBERSHIP
Asia Pacific Buy List
 
 
Coverage View:  Neutral

Bosch:: Fine print :: CLSA

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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

Bosch 1QCY11 results: PAT growth (+36% yoy) surprises; PT Rs7,450 :: JP Morgan

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Bosch Limited
Overweight
BOSH.BO, BOS IN
1QCY11 results: PAT growth (+36% yoy) surprises; we raise our PT


1Q CY11 PAT of Rs2.7B (+36% yoy) was above estimates led by
healthy top-line growth and lower depreciation charges. Revenue of
Rs20.7B (+31% yoy) was driven by healthy growth across segments –
exports +49% yoy, diesel segment +35% yoy, aftermarkets +20% and
power tools, etc. +20%. Depreciation charges were lower (-17% yoy)
as the new capacities are likely to get commissioned only from 2Q
onwards.

Goldman Sachs:: Bosch - In line with expectations: Demand drives earnings; Conviction Buy

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Bosch India (BOSH.BO)
Buy Equity Research
In line with expectations: Demand drives earnings; Conviction Buy
What surprised us
Bosch reported 1QCY11 net income of Rs2.7 bn, up 35% yoy, 30% qoq and
11% higher than our estimates. Five key takeaways, in our view: 1)
adjusting for lower depreciation (about 40% below our estimates, due to
newly purchased machines & equipment not yet brought into production)
during the quarter, net income was in line with our estimate. 2) EBITDA
margin was stable in our view (down less than 1 pp yoy, up 1.5 pp
qoq)driven by higher raw material expenses offset by lower fixed costs as
a percentage of revenue. 3) Management expects 12%-15% industry-wide
demand growth in FY12E and observes commensurate OEM order inflow
currently. The company highlighted that risks of higher fuel and interest
costs are offset by a strong new product pipeline at the OEMs. 4) It expects
increasing localization of power train production of foreign OEMs, though
this could take time due to current low volumes. 5) The company does not
foresee significant capacity constraints in the system during 2011.

Bosch 1Q CY11: Strong OEM demand growth, stable margins boost earnings

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Bosch
1Q CY11: Strong OEM demand growth, stable margins boost earnings


 Bosch’s net sales rose 31% yoy to Rs20.9bn led by
strong OEM demand.
 Its operating margin remained stable yoy at 18.9%
despite rising cost pressure.
 While auto segment margin rose 130bps yoy to 18.9%,
non-auto segment margin declined 400bps qoq to 9.3%.
 Net profit rose 36% yoy to Rs2.7bn.
 We roll over our target multiple to Jun ’12E.
 Maintain IN-LINE with a revised price target of Rs6,682
(earlier Rs6,180).

Accumulate Bosch – 4QCY2010 Result Update - Angel Broking

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Bosch – 4QCY2010 Result Update

Angel Broking maintains an Accumulate on Bosch with a Target Price of Rs. 6,753.

Bosch reported strong set of numbers for 4QCY2010, which were better than our

expectations on the top-line front. However, lower-than-expected EBITDA margins

on account of raw-material cost pressures led to in-line growth in the bottom line.

Growth was largely aided by sustained momentum in commercial vehicle (CV)

sales. We broadly maintain our earnings estimates for the company and maintain

our Accumulate view on the stock.

JP Morgan: Bosch 4QCY10 results: PAT growth (+33% yoy) ahead of estimates, raising PT

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Bosch Limited
Overweight
BOSH.BO, BOS IN
4QCY10 results: PAT growth (+33% yoy) ahead of estimates, raising PT


• 4QCY10 PAT at Rs.2.1B (+33% yoy) was above estimates driven by
healthy topline growth, margin expansion (+170bp yoy), lower
depreciation expenses as well as modest tax rates. Over CY10, Bosch
has reported revenues at Rs.67B (+41% yoy), driven by all round
growth - diesel segment sales were healthy, led by robust CV and
tractor sales as well as rising sales of diesel cars, export sales were
driven by renewed exports to Europe and aftermarket segment sales
benefited given a buoyant economy as well as increased focus by the
company on this segment.

Result Review Bosch – 4QCY2010 : Angel Broking,

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Result Review
Bosch – 4QCY2010
For 4QCY2010, Bosch reported better-than-expected 29.5% yoy (10% qoq) top-line growth
to `1,884cr (est. `1,729cr), aided by a robust 35% yoy jump in the auto segment’s revenue
and a 24% increase in non-auto revenue. EBITDA margin came in 233bp below our estimate
at 16.4%, a decline of 75bp yoy and 335bp qoq. While raw-material cost during the quarter
declined by 604bp yoy, a significant 871bp increase in purchase of traded goods led to
contraction in EBITDA margin. However, led by strong top-line growth, net profit increased
by 33% yoy (down 10.8% qoq) to `211cr.
At `5,985, the stock is trading at 19x CY2011E and 17.7x CY2012E earnings. We maintain
our positive outlook on the company and shall release a detailed note on the result
update shortly.

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

Goldman Sachs: Buy Bosch : India: Conviction List

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Automobiles: Bosch India (BOSH.BO, Buy, on our Conviction List)
• technology differentiation top quartile cash Strong drives top-returns and margins stability through the cycle, in our view. About 75% market share
in Fuel Injection space, track record of industry-shaping innovations in areas like braking, traction control systems, etc
• Step-up in growth and returns driven by strong demand - 30% 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