Sustained auto sector recovery, margin gains to support Bosch stock

Higher content share in BS-VI, two-wheeler electric vehicles offer incremental opportunities

Bosch has gained over 25 per cent on the bourses since the last couple of months, after having underperformed the broader markets for the better part of last year.

Double-digit volume growth across key auto segments, increased content per vehicle after the implementation of BS-VI norms, and expectation of margin gains have led to the recent rally in the stock of India’s largest auto component maker.

The broad-based recovery in auto segments (including commercial vehicles) and expectations of improvement were major triggers for the parts supplier. While it supplies injectors, nozzles, starters, and generators, its largest segment continues to be fuel injection