Companies

Bosch reports Q1 net loss at ₹120 cr

Our Bureau. Bengaluru | Updated on August 11, 2020 Published on August 11, 2020

Soumitra Bhattacharya, Managing Director, Bosch, and President, Bosch Group in India

Bosch Ltd, a supplier of technology and services, posted a net loss of Rs 120 crore, while total revenue declined 64 per cent to Rs 992 crore in the first quarter of FY 2020–21 with the Covid-19 pandemic adversely impacted sales in all segments.

A statement from the company said loss before tax without the inclusion of exceptional items stood at Rs 3.3 crore. This is 0.3 per cent of total revenue from operations, and mainly reflects the effect of lockdown during the quarter.

The Indian automotive market continues to undergo structural changes. Bosch Limited has continued its investment in restructuring, reskilling, and other transformational projects. An additional provision of Rs 197 crore has been disclosed as an exceptional item for the quarter ended June 30, 2020, for this purpose.

“As anticipated, the financial year 2020-21 began on an extremely challenging note. The Indian economy is expected to witness sharp contraction, with GDP projected to be between minus 4 per cent and minus 6 per cent in the current fiscal year. Multiple lockdowns in several states are adversely affecting the supply chain. With the ripple effect of this continuing to be felt in the coming years, we now have to do all we can to counter the business situation while exhibiting utmost care for our associates,” said Soumitra Bhattacharya, the managing director of Bosch Ltd. “The focus for the upcoming quarters will remain on the agriculture sector, particularly on tractor demand. However, the auto sector as a whole will take four to five years to return to the levels of 2018-19,” he added. 

The combination of the slowdown in the automotive industry and Covid-19 is affecting Bosch Limited’s sales. Sales decreased 68.2 per cent in the first quarter of FY2020–21, with the Powertrain Solutions division registering a decline of 78.3 per cent. However, the two-Wheeler and Powersports product unit witnessed good double-digit growth during the quarter. Outside the Mobility Solutions business sector, the business recorded a decline of 59.9 per cent. In June 2020, the company witnessed a recovery in sales volumes after the easing of nationwide lockdown restrictions.

To secure liquidity, extensive programs to adjust manufacturing capacity and cost structures are in place. At the same time, the company is preparing for a potential switch to electrified vehicles, which will lead to a significantly reduced demand for direct manpower as compared to 2018-19. Right-sizing the organization is, therefore, an urgent need. Here, the company is following a 3R approach (restructure, reskill, redeploy), in which it has invested Rs 800 crore.

Bosch Limited has decided to buy solar power from AMP Solar Technology Private Limited and Hinduja Renewables Energy Private Limited for use in its facilities in Karnataka and Maharashtra respectively. In line with the captive power generation rules of the respective states, Bosch is taking a minority stake in these power projects. This acquisition will mean a substantial increase in the green energy procured by Bosch India, thus further supporting Bosch’s move toward carbon neutrality.

 

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Published on August 11, 2020
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