Bosch Q4FY13 Results: On A Revival Path

Bosch announced its March 2013 quarter results on April 29, 2013. Though the numbers are not good on a YoY basis, there seems to be some betterment seen on QoQ. Here, the company posted a topline of Rs 2207.5 crore as against Rs 2131.80 crore in December 2012 (marking an increase of 3.55%) and Rs 2295 crore in March 2012 (a decline of 3.81%).

A detailed analysis of the revenues clearly indicates that the automotive segment has been a weak link. It was the non-auto segment which helped the company to grow better on the revenue front. To quantify this, the automotive segment posted a topline of Rs 1902.96 crore in the March 2013 quarter as against Rs 1917.43 crore in December 2012 and Rs 2037.30 crore in March 2012. The overall pessimism clouding the auto sector has clearly left an impact here. However, in the non-auto segment it posted a topline of Rs 306.23 crore against Rs 225.27 crore and Rs 275.52 crore respectively for the corresponding quarters.

Though the automotive segment usually contributes the bulk of the PBIT, in this quarter its operating margins have actually declined on a YoY basis. The results clearly show that there is still some pressure on the margins front. It appears that lower demand has resulted in pricing pressures.

On the bottomline front, Bosch posted a net profit of Rs 259.77 crore for March 2013 quarter as against Rs 172.05 crore in December 2012 and Rs 335.82 crore in March 2012. As is evident, the improvement has been on a QoQ basis.

On the valuations front, the scrip is trading at 32x its trailing four quarter earnings. Though this is on the higher side, companies like Bosch always enjoy a premium on the bourses. We recommend that investors hold the scrip from a long-term perspective.