Aftermarket business aids Bosch’s modest revenue growth of 2.6% to ₹3,109 crore in Q3

Bosch Limited, a leading supplier of technology and services, posted total revenue from operations of ₹3,109 crore in Q3 FY22, an increase of 2.6 per cent from ₹3,030 crore in the same period of the previous year. The company said that the revenue increase could largely attributed to growth in aftermarket business given that overall automotive market production in India (excluding two wheelers) declined by 12 per cent.

Profit before tax stood at ₹336 crore amounting to 10.8 per cent of total revenue from operations. Profit after tax stood at ₹235 crores, that is 7.6 per cent of revenue from operations. Net profit was up 26.4 per cent compared to the same period of the previous year but was down by nearly 57 per cent compared to the second quarter of the current fiscal.

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Localisation of technology

This year, Bosch is celebrating its 100^th anniversary in India. The company opened its first local sales agency in Kolkata in 1922. Today, Bosch encompasses 18 manufacturing sites and 7 development and application centers, and employs close to 31,500 associates.

Soumitra Bhattacharya, Managing Director, Bosch Limited and President of the Bosch Group in India, told BusinessLine that business had been impacted due to supply chain issues and the global semiconductor shortage. He said there were margin pressures due to the increase in prices of steel and aluminium. “It’s been a decent performance under very difficult supply chain issues and specially semiconductor shortage, which I repeat is a industry - worldwide issue. Apart from aftermarket, our power tools and powertrain business has done well.”

Employee rationalisation

Responding to a question on employee rationalisation, he said: “For the restructuring, we did it in a very Bosch like way with some of the best packages in the voluntary programme. We have done with a lot of care and concern with typical Bosch ethics and values. So in summary, personnel costs, which used to hover around 14 per cent of the turnover, is down to 10 per cent.”

The company has spent ₹750 crore each over the last two fiscal years on the rationalisation exercise, Bhattacharya added “That’s ₹1,500 crore. It was not just restructuring, it was redeployment. It was reskilling and restructuring. The permanent headcount today is far better trained and has more competencies.”

Over the last two-year fiscal years, the headcount at Bosch Ltd has reduced by around 2,500 and it now stands at around 6,000 permanent employees, the company added.

“Bosch’s 100-year journey in India is not just heritage but a significant landmark which has punctuated several path-breaking milestones and achievements aligned with ‘Make in India’. Over the past decade, we have invested more than ₹8,000 crore in India,” said Bhattacharya.

“Bosch India will continue its contribution to building an Atmanirbhar Bharat through an investment of over ₹1,000 crore for the localisation of advanced automotive technologies in the next five years. An additional ₹1,000 crore will be put into expanding digital platforms like mobility marketplace and mobility cloud platform,” Bhattacharya added.

Focus on EVs

Bosch also predicts that by 2030, every third new vehicle in India will be an EV. The company is evaluating multiple opportunities arising from electrification developments and continuing to invest in building a sustainable and self-reliant mobility ecosystem in India.

On the recently announced Budget, Bhattacharya said, “The new initiatives announced at the Union Budget 2022 come as an impetus to boosting the EV ecosystem in India through the development of special mobility zones with zero fossil fuel policy and battery swapping technology. The government’s plans to promote electrification in pursuit of incurring required capex in this domain will spur a robust ecosystem for electric vehicles in India.”

Product sales increased by 3.6 per cent in the third quarter of FY22, with the aftermarket division witnessing an increase of 29 per cent due to high demand for diesel products and strategical changes in the supply chain leading to higher sales fulfilment. Outside the mobility solutions business sector, Bosch recorded an increase of 11 per cent, mainly due to business growth in the building technologies division.

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