Bosch Limited net declines 12% to Rs 287 crore in Q4

Company plans to invest Rs 650 crore in FY16 on expansion across country

Bosch Limited, supplier of automotive components to original equipment manufacturers (OEMs) and technologies, today announced that its net profit for the fourth quarter ended March 2015 has declined 11.9% to Rs 287 crore as against Rs 326 crore in the corresponding quarter last year.

The drop in net profit is mainly on account of muted growth in topline growth and higher tax outgo due to change in taxation on mutual funds and higher depreciation on higher asset base. The company’s net sales and income from operations witnessed a marginal decline of 3.4% to Rs 2,349 crore compared to Rs 2,431 crore.

The operating profit for the quarter, however, went up 4.8% to Rs 325 crore as against Rs 310 crore in the year ago quarter.

“Within the segment of mobility solutions, revenue for gasoline systems and starters & generators divisions has grown significantly. However, this could not fully compensate the decrease of both diesel systems, which suffered from the weak tractor market and a declining diesel-share in passenger cars, as well as automotive aftermarket,” Steffen Berns, managing director, Bosch Limited said.

The weak consumer demand and suppressed liquidity in the market have put additional pressure on the company’s smaller non-mobility solutions segments too.

“The market performance of the coming quarters will be determined by factors such as monsoon, fuel prices, interest rates and speed of execution of government reforms. We expect moderate growth in the automotive industry and remain cautiously optimistic about the Indian market this year,” Berns added.

For the full year ended March 2015, which comprised of 15 months as last year the company decided to switch over to financial year pattern, the company reported a net profit of Rs 1,338 crore, a growth of 51.3% compared to Rs 884 crore reported in the January to December 2013. It registered net sales of Rs 11,941 crore, showing a growth of 38% over the January to December 2013 period.

During the last year, the company expanded its market presence in the automotive aftermarket segment by adding around 300 new distributors to the sales network in India.

Over the next 12 months, Bosch plans to invest Rs 650 crore on expansion of its facilities across the country including construction of the new facility at Bidadi, about 35 kms from Bengaluru. The company plans to shift its manufacturing facility from Bengaluru to Bidadi during the third quarter of this year, Berns added.