Bosch India Ltd. has given a 80% return on a year on year basis as the Auto Ancillary Stocks have rallied on recovery of the Auto sales in the current financial year 2014-15. We had published the analysis on the stock at Rs.8780 per share and the current market price of the stock is at Rs.14,869 per share.
Bosch India was incorporated in November 1953 in India in collaboration with Robert Bosch GmbH that has a stake of 71.18%. Bosch India has its headquarters in Bangalore and manufacturing facilities are located in Bangalore, Ahmedabad, Nashik, Naganathapura, Coimbatore, Chennai, Jaipur and Goa. The main auto components that the company manufactures is the spark plug for petrol engines and fuel injection systems for diesel and petrol engines. The company also caters to the automotive segments such as electronics, car multimedia, chassis systems control, electrical drives, starter motors and generators and steering systems. The company has a wide sales and distribution network spread across 1000 towns to cater to the replacement market demand in the auto component space.
The Company has a 90% share in fuel injection systems supplied to the domestic Commercial vehicles and tractor OEMs. The replacement demand contributes 25% to the revenues of the company. The Bosch Group internationally spends around USD 5.5 billion in Research and Development and has 77,000 patents and utility models to its name.
The Engine parts have a 31% contribution to the revenues in the auto component industry and Bosch is an undisputed leader in the commercial vehicles and tractor segment with a strong technological base. The company has a monopoly in the supply of fuel injection equipment and spark plugs to the automobile industry. The company is a market leader in the diesel injection system used in the diesel engine. Bosch Global has competition from Delphi and Denso Corporation that also supply fuel injection systems but both players have limited presence in the Indian market. Bosch has also consolidated its position to achieve the economies of scale to generate higher returns on investment.
The Company reported Sales of Rs.8659 crores with an EBITDA of Rs.1351 crores and a net profit of Rs.958 crores in CY 2012. The EBITDA margin was 15.6% and the net profit margin was 11%. The Earnings per share was reported at Rs.305.20 and the Return on Capital Employed (RoCE) was reported at 17.1% for CY 2012. The company has shown a CAGR of 18.8% in revenues and the net profit has increased eightfold from CY 2002 to CY 2012.
The Fuel Injection Equipment contributes 47% to the revenues followed by injectors and nozzles at 23.5%, Portable electric and Power tools at 7%, Auto electric power tools at 10.5% and other products at 12%. The Commercial Vehicles segment contributes 55% to the revenues followed by Passenger Vehicles at 20%, Tractors at 15% and non-auto business at 10%. Engine parts and Fuel Injection segment has second highest RoCE in the Auto Component Industry with the first highest by the Tyre Industry.
The company had a debt of Rs.185 crores at the end of CY 2012 with current market capitalization of Rs.27,459 crores and Enterprise Value of Rs.24,586 crores with a Price to Earnings multiple of 28.65 at Rs.8780 per share. The Price to Book Value is Rs.4.94 and the Market Capitalization to Sales ratio is 3.17. The company had announced an interim dividend of 600% per share for a face value of Rs.10 in the month of May 2013. The company has shown a 19.1% growth in the dividends paid out in the last 5 years. The Promoters have a shareholding of 71.18% and the FIIs have a shareholding of 7.09% in the company.
The company reported a 15.48% increase in the net profit to Rs.202.84 crores with revenues of Rs.2104 crores for the quarter ended September 2013. The slowdown in the CV segment has not affected the company as it continues to show robust growth in profit and revenues on a year on year and quarter on quarter basis. A pick up in the CV demand would drive growth in the future for the company.
