Bengaluru, India – Bosch Limited, a leading supplier of technology and services, posted total revenue from operations of INR 2,779 crores in Quarter 1 of FY 2019–20, a decline of 13.5 percent. The noticeable drop is mainly due to the automotive market slowdown during the quarter in all the segments.
Profit before tax (PBT) before exceptional items stood at INR 504 crores. This is 18.1 percent of total revenue from operations, and a year-on-year drop of 22.3 percent, mainly affected due to lower turnover, commodity price increase and unfavorable forex. Profit after tax (PAT) before exceptional item stood at INR 334 crores which is 12.0 percent of total revenue from operations.
The Indian automotive market is undergoing major changes as a result of various economic, regulatory, technological, and market factors, including opportunities arising in electromobility and mobility solutions segments. In light of this, the company has initiated several transformation projects, including restructuring, to remain competitive. The company has set up a provision of INR 82 crores towards restructuring, reskilling and redeployment, that has been disclosed as an exceptional item for the quarter ended June 30, 2019.
After allowing for this exceptional item, profit before tax (PBT) stood at INR 422 crores, or 15.2 percent and Net profit after tax (PAT) stood at INR 280 crores, a decline of 35 percent over the same period of previous year.
“The automotive industry in India is going through a paradigm shift. The slowdown is not cyclical, but structural. Shortage of liquidity accompanied with build-up of inventory, will pose a big challenge and the recovery will take longer than expected. With the outlook for this sector being extremely challenging, the impact on structures, including surplus manpower, is already visible. At Bosch Limited too, we have been investing in restructuring, to enhance efficiencies and to be fit for the future. While every opportunity will be extended for reskilling and redeployment, to align with adjustment of portfolios and competencies, there will be manpower adjustments,” said Soumitra Bhattacharya, the managing director of Bosch Ltd.
Snapshot of divisions’ performance in Quarter 1
“Bosch Limited is deeply committed to the future growth of India. Key investments in future technologies and innovative solutions in the mobility and non-mobility segments will continue. While doing this necessary course correction measures will be taken in order to remain competitive in these challenging times,” added Mr. Bhattacharya.
Worldwide, the automotive industry is facing a downward trend. This is also affecting Bosch Limited’s automotive sales, which decreased 17.5 percent in first quarter of 2019–20. Domestic sales decreased 18.2 percent, while export sales declined 8.6 percent. Though the Power Tools and Security Systems divisions disclose positive growth, the company’s non-automotive business posted a decline of 16.0 percent. This was primarily due to a drop in the energy services business.
