Bosch growth outlook supported by localisation, new JVs and regulatory content gains

Investment View and Recommendation

ICICI Securities’ November 9, 2026 results update maintains its BUY recommendation on Bosch, describing the company as one of its top picks in auto ancillaries despite temporary margin headwinds.

The positive thesis rests on the India entity’s increasing strategic importance to its global parent, greater product breadth following the safety-components acquisition and new joint ventures, a sharper focus on localisation, and potential content-per-vehicle gains from CAFÉ 3 and BS-7 regulations.

Q2FY27 Financial Performance

Bosch reported consolidated Q2FY27 revenue of Rs 7,655 crore, up 28 per cent YoY and 7 per cent QoQ, which was 6 per cent above ICICI Securities’ estimate. Consolidated EBITDA rose 23 per cent YoY and 6 per cent QoQ to Rs 1,037 crore, although it was around 3 per cent below the broker’s forecast. EBITDA margin declined to 13.5 per cent, down 60 basis points YoY and 10 basis points QoQ, as raw-material inflation and unfavourable foreign-exchange movement hurt profitability. Adjusted PAT was Rs 743 crore, up 5 per cent YoY but down 9 per cent QoQ.

Segment and Business Performance

The mobility solutions segment grew 30 per cent YoY, while consumer goods grew 17 per cent YoY.

• Power solutions: Revenue increased around 36 per cent YoY, aided by underlying demand and pre-festive inventory build-up.
• Vehicle motion: Revenue grew 35 per cent YoY on strong four-wheeler demand.
• Two-wheelers: The business increased around 18 per cent YoY, supported by dispatches of exhaust-gas sensors, fuel injectors and ABS.
• Aftermarket: Revenue rose 13 per cent YoY, with strong growth in diesel systems, spark plugs and rotating-machinery portfolios.

Bosch Chassis Systems, or RBIC, delivered 28 per cent YoY revenue growth, led by vehicle-motion passenger-vehicle braking components and two-wheeler power-sports. However, its EBITDA margin declined 340 basis points YoY to 15.6 per cent because of raw-material inflation and foreign-exchange movement.

Management Commentary and Growth Drivers

Management expects underlying automotive industry growth to moderate in H2 because of a high base. Bosch is evaluating opportunities for the India entity with its parent amid the global macro environment and remains focused on improving localisation.

Discussions with customers regarding the pass-through of raw-material inflation and foreign-exchange movements are ongoing, which could gradually support margins.

• CAFÉ 3, effective April 2027, and proposed BS-7 norms are expected to raise Bosch’s content per vehicle.
• The company is engaging OEMs to align platforms with these requirements.
• The Tata AutoComp e-axle joint venture in Nashik is expected to start production in mid-FY28.
• The TSF Group joint venture for electronically enabled air systems in Chennai is expected to begin production by end-FY28.
• Bosch is discussing hybrid-technology supply with multiple passenger-vehicle OEMs.

Earnings Estimates and Valuation

ICICI Securities raised FY27E to FY29E revenue estimates by 2 per cent but reduced FY27E and FY28E EBITDA estimates by around 2 per cent, reflecting a gradual cost pass-through.

The target price was raised to Rs 62,500 from Rs 57,500, based on 45 times FY29E EPS.

Key Downside Risks

• Lower-than-expected underlying industry growth, especially in commercial vehicles and tractors.
• Failure to secure orders for newer products.
• Loss of market share to competitors.