Companies

Bosch Q1 profit slumps 35% to ₹278 cr on slowing auto industry

Our Bureau Bengaluru | Updated on August 13, 2019 Published on August 13, 2019

The downturn in the auto industry has impacted the country’s largest auto parts’ maker, Bosch Ltd whose net profit has nosedived 35 per cent to ₹279.95 crore for the quarter ended June 2019.

The company also said it has set up a provision of ₹82 crore towards restructuring, reskilling and redeployment, which has been disclosed as an exceptional item for the quarter.

“The automotive industry in India is going through a paradigm shift. The slowdown is not cyclical, but structural. Shortage of liquidity accompanied by a build-up of inventory will pose a big challenge and the recovery will take longer than expected. With the outlook for this sector being extremely challenging, the impact on structures, including surplus manpower, is already visible,” said Soumitra Bhattacharya, Managing Director of Bosch Ltd, said in a statement.

The total revenues decreased 13.5 per cent to ₹2,779 crores during the quarter. The noticeable drop is mainly due to the automotive market slowdown during the quarter in all the segments, Bosch said. PBT was down 22.3 per cent due to lower turnover, commodity price increase and unfavourable forex.

The Indian automotive market is undergoing major changes as a result of various economic, regulatory, technological, and market factors, including opportunities arising in electromobility and mobility solutions segments. In light of this, the company has initiated several transformation projects, including restructuring, to remain competitive.

“At Bosch too, we have been investing in restructuring, to enhance efficiencies and to be fit for the future. While every opportunity will be extended for reskilling and redeployment, to align with adjustment of portfolios and competencies, there will be manpower adjustments,” Bhattacharya said. He said course correction measures will be taken to remain competitive in these challenging times.

The statement said worldwide, the automotive industry is facing a downward trend. This has affected Bosch’s automotive sales which decreased 17.5 per cent during the first quarter. Domestic sales decreased by 18.2 per cent while export sales fell 8.6 per cent. The company’s non-automotive business posted a decline of 16 per cent. This was primarily due to a drop in the energy services’ business.

The Bosch Group operates in India through 13 companies, including Bosch Ltd, Bosch Chassis Systems and others. The group has 18 manufacturing sites, and seven development and application centres.

Published on August 13, 2019
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.