The Hindu Business Line : Auto sector slowdown puts brakes on Bosch’s profit, sales in 2007

Mr Ferdinand Allerkamp, Joint Managing Director, Bosch Ltd, and Mr Vishwananthan V.K., Managing Director, at a press conference in Bangalore on Thursday. — G.R.N. Somashekar

Our Bureau

Bangalore, March 6 Bosch Ltd (formerly Motor Industries Co Ltd) has said that a slowdown in the automobile industry during 2007 affected its performance, with the autoparts maker posting a marginally lesser net profit last year compared with the previous year.

Its net sales during 2007 grew to 13 per cent, notching Rs 4,279.6 crore. This was much lesser than its net sales during 2006, which posted a 100 per cent increase to Rs 3,783 crore compared with the previous year.

Bosch’s Managing Director, Mr V.K. Viswanathan, told newspersons here on Thursday that the company posted a 14.2 per cent increase in net profit to Rs 609.20 crore for 2007. “The results have been below our expectations because of market developments,” Mr Viswanathan said. Vehicle sales in India grew about 10 per cent in 2007 compared with 22 per cent growth in 2006.

Bosch’s entire group’s sales increased 14 per cent to Rs 5,700 crore. Its net profit would have been lower but for the increase in other income, which grew nearly 7 per cent to Rs 297 crore while earnings from interest increased nearly 2 per cent to Rs 81 crore. Bosch’s exports grew 7 per cent to Rs 673 crore in 2007.

Bosch’s Joint Managing Director, Mr Ferdinand Allerkamp, pointed out that the rise in other income was because several mutual funds matured during the year and due to write-back of provisions as the Bangalore plant was restructured.

Dividend

The company has also declared a dividend of Rs 25 per share which works out to 15.4 per cent of payout as a percentage of profit after tax.

Last year, the company had declared a dividend of Rs 16 per share with the payout as a percentage of profit after tax, working out to 13.3 per cent.

Bosch’s Joint Managing Director, Mr M. Lakshminarayan, said the company plans to double the headcount from last year to about 1,000 people but that would depend on the growth of the automobile sector in India.

Bosch also plans to invest about Rs 400 crore during 2008, the same as last year. Bosch’s parent has earmarked a total investment of Rs 2,650 crore in its Indian operations till 2010.

Mr Viswanathan said the company was bullish in the medium to long term but in the near term, it expected some improvement from the third quarter.

“We expect a clearer picture to emerge after the first quarter results are announced,” he said.

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Auto sector slowdown puts brakes on Bosch’s profit, sales in 2007