Auto components major Bosch Ltd on Friday reported a 80.29 per cent decline in consolidated net profit at Rs 81.14 crore in the fourth quarter ended March 31, 2020 due to a provision for restructuring and transformational projects, besides market slowdown and the impact of coronavirus pandemic in the last few days of the quarter.
The company, which posted a consolidated net profit of Rs 411.70 crore in the year-ago quarter, said it is reducing planned capex by up to 50 per cent for the ongoing fiscal due to the coronavirus pandemic.
Revenue from operations during the quarter under review stood at Rs 2,236.87 crore as against Rs 2,729.91 crore in the same period a year ago.
During the quarter, Bosch made an incremental provision of Rs 297 crore as part of an overall provision of Rs 717 crore towards various restructuring, reskilling and redeployment initiatives for 2019-20.
For the fiscal 2019-20, the company said its consolidated net profit stood at Rs 649.82 crore as against Rs 1,598.04 crore in 2018-19.
Revenue from operations for FY20 stood at Rs 9,841.63 crore as compared with Rs 12,085.02 crore in FY19.
Bosch Ltd Managing Director Soumitra Bhattacharya said the results were in line with the downward trend in automotive industry, which has been going through a challenging phase for sometime, and is now dealing with the impact of coronavirus.
Addressing media via videoconference, he said the auto industry has been set back by around 4-6 years due to the combined effect of slowdown that was existing before COVID-19 and the impact of the pandemic.
Commenting on the impact of lockdown, he said April was a total wipe out for the entire industry in India.
When asked how the company sees recovery from the current situation, Bhattacharya said it would be a slow start in May and June, with auto sector activity at around 20-25 per cent.
When asked if the company has scaled back its capex for the fiscal, he said the company's capex in the last five years was in the range of Rs 350 crore to Rs 500 crore, but it would be reduced to 40-50 per cent of that for the ongoing fiscal, with all non-essential expenditures being cut.
"Bosch is adapting to the current market developments with measures to manage resources and enhance operational efficiencies. Various restructuring and transformation projects are under implementation to secure future profitability and growth," he said.
Bhattacharya, however, said, "We will continue our investments in future business viz. electrification, mobility services and revamping of our Adugodi campus as a technology hub."
He also said the company has not cut jobs or salaries of its employees due to the coronavirus pandemic.
Asked if migration of labourers has impacted the company's plant operations, he said that as the company does not employ contract labours, it hasn't been affected much.
However, with its suppliers relying on such contract workers, there could be supply chain issues.
On resumption of activities, Bhattacharya said all of the company's 16 manufacturing plants have started production at around 10-20 per cent level, and added that it would ramp up production gradually after taking into account safety of its employees and depending on customer demand to avoid inventory build up.
Commenting on the government's economic package, he said while it would help sectors like MSME, there will be no direct impact on auto sector, with demands such as reduction of GST and scrappage policy yet to be met.
"On behalf of the auto sector, I look forward to direct stimulus package for the auto industry from the government," Bhattacharya said.
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