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Bosch bets on CAFE III, ADAS and localisation for margin lift
Bosch sees EBITDA margin sustaining near 14% as CAFE III, ADAS mandates and localisation drive the next growth phase, MD Mudlapur told analysts.
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Bosch Ltd expects to hold its EBITDA margin near 14% after breaking above the 12-13% post-Covid range, betting on tighter emission rules, driver-assistance mandates and deeper local sourcing to drive growth over the next three to five years, Managing Director Guruprasad Mudlapur told analysts on Tuesday.
“We have done quite a few things over the last several years which has led to a sustained improvement in our margins,” Mudlapur said. He cited operational excellence, higher localisation, volume growth, productivity and a favourable product mix. “Overall, I would say we are on an upward trend, and we would say that we will sustain this.”
Standalone revenue from operations rose 22% year-on-year to ₹5,842 crore in the June quarter, up 5% sequentially. EBITDA climbed 28% to ₹818 crore, yielding a 14% margin. Profit after tax stood at ₹702 crore, down 37% from a year earlier, when the quarter included an exceptional gain. Stripping that out, PAT grew 9.9%.
Regulation as a growth driver
A core part of Bosch’s next growth leg comes from regulatory changes. Its power solutions business grew 29% year-on-year, outperforming the market across passenger vehicles, off-highway vehicles and tractors. Mudlapur said the upcoming CAFE Phase III rules “should be an even better boost”. He also flagged commercial-vehicle ADAS as “a whole new technology, a regulated market” that could add another revenue stream.
The company expects higher vehicle volumes, new products and premiumisation to drive revenue over the next three to five years.