Bosch India - 1QCY2011 Results
| Y/E March (Rs cr) | 1QCY11 | 1QCY10 | % chg (yoy) | Angel Est. | % Diff. |
| Net Sales | 2,086 | 1,596 | 30.7 | 1,818 | 14.7 |
| EBITDA | 394 | 305 | 29.3 | 298 | 32.4 |
| EBITDA Margin (%) | 18.9 | 19.1 | (21)bp | 16.4 | 253bp |
| Reported PAT | 274 | 203 | 35.5 | 201 | 36.3 |
Source: Company, Angel Research
Review
v Top-line up 30.7% yoy; up on robust auto segment growth - Bosch reported a robust 30.7% yoy and 10.7 qoq growth in top-line at Rs2,086cr, which was above our expectation of Rs1,818cr and largely aided by the jump in auto segment revenues, which increased by ~32% yoy and 15.2% qoq to Rs1,860cr. Non-auto business also recorded a strong growth of ~30% yoy and 38.3% qoq during the quarter.
v EBITDA margins expands 249bp on a qoq basis to 18.9% - On the operating front, EBITDA margins came in 253bp above our estimate at 18.9%, a jump of 249bp qoq. On a yoy basis though, margins declined marginally by 21bp. A 315bp increase in raw material cost due to the surge in commodity prices was offset by 339bp decline in employee expenses helping the company report better margins. As a result, operating profit grew 29.3% yoy and 27.5% qoq.
v Strong net profit growth; up 35.5% yoy - The company reported better than expected net profit growth of 35.5% yoy and 30.3% qoq to Rs274cr aided largely by healthy top-line performance and improved operating leverage. Further, net profit growth was also supported by significant increase in interest income which grew ~86% yoy. Higher tax rate and lower other income restricted the bottom-line growth to a certain extent during the quarter.
Outlook
v Bosch's medium-term prospects are derived largely from the demand arising in the CV and tractor segments, which are estimated to post CAGRs of ~10% each over FY2011-13E. Further, greater visibility on newer growth opportunities is emerging for the company following its investments in new and innovative technologies such as CRS and gasoline systems. We believe the company will continue to enjoy premium valuations owing to strong parental focus and increasing long-term growth opportunities in the Indian market facilitated by changes in the emission norms. Moreover, Bosch has been a consistent performer with strong cash flows in the Indian auto component industry.
At current levels, the stock is trading at 22.5x CY2011E and 20x CY2012E earnings. The stock rating is currently under review and we would be releasing a detailed result update post the earnings call with management.
1QCY2011- Performance (Standalone)
| Y/E Dec (Rs cr) | 1QCY11 | 1QCY10 | % chg | CY2010 | CY2009 | % chg |
| Net Sales (incl. Op. inc) | 2,086 | 1,596 | 30.7 | 6,899 | 5,009 | 37.7 |
| Consumption of RM | 746 | 519 | 43.7 | 1,970 | 1,554 | 26.8 |
| (% of Sales) | 35.8 | 32.5 | 28.6 | 31.0 | ||
| Staff Costs | 216 | 218 | (1.0) | 802 | 614 | 30.7 |
| (% of Sales) | 10.3 | 13.7 | 11.6 | 12.3 | ||
| Purchase of FG | 429 | 327 | 31.1 | 1,628 | 996 | 63.4 |
| (% of Sales) | 20.6 | 20.5 | 23.6 | 19.9 | ||
| Other Expenses | 301 | 226 | 32.9 | 1,228 | 1,018 | 20.6 |
| (% of Sales) | 14.4 | 14.2 | 17.8 | 20.3 | ||
| Total Expenditure | 1,692 | 1,291 | 31.1 | 5,629 | 4,183 | 34.6 |
| Operating Profit | 394 | 305 | 29.3 | 1,271 | 826 | 53.8 |
| OPM (%) | 18.9 | 19.1 | 18.4 | 16.5 | ||
| Interest | (46) | (25) | 86.2 | (114) | (131) | (12.3) |
| Depreciation | 47 | 57 | (16.8) | 254 | 304 | (16.4) |
| Other Income | 11 | 19 | (41.4) | 72 | 140 | (48.9) |
| PBT (excl. Extr. Items) | 404 | 292 | 38.4 | 1,203 | 793 | 51.6 |
| Extr. Income/(Expense) | 0 | 0 | - | 0 | 0 | - |
| PBT (incl. Extr. Items) | 404 | 292 | 38.4 | 1,203 | 793 | 51.6 |
| (% of Sales) | 19.4 | 18.3 | 17.4 | 15.8 | ||
| Provision for Taxation | 130 | 89 | 45.2 | 344 | 203 | 69.6 |
| (% of PBT) | 32.1 | 30.6 | 28.6 | 25.6 | ||
| Reported PAT | 274 | 203 | 35.5 | 859 | 591 | 45.4 |
| PATM (%) | 13.2 | 12.7 | 12.4 | 11.8 | ||
| Equity shares (cr) | 31.4 | 31.4 | 31.4 | 31.4 | ||
| Reported EPS (Rs) | 87.4 | 64.5 | 35.5 | 273.5 | 188.1 | 45.4 |
Source: Company, Angel Research
Key Financial Table
| Y/E Dec (Rs Cr) | CY2009 | CY2010E | CY2011E | CY2012E |
| Net Sales | 4,822 | 6,699 | 7,925 | 9,043 |
| % chg | 4.8 | 38.9 | 18.3 | 14.1 |
| Net Profits | 591 | 859 | 960 | 1,080 |
| % chg | 6.9 | 45.4 | 11.7 | 12.6 |
| OPM (%) | 16.5 | 18.4 | 17.6 | 17.5 |
| Adj. EPS (Rs) | 188.2 | 273.5 | 305.6 | 344.1 |
| P/E (x) | 36.5 | 25.1 | 22.5 | 20.0 |
| P/BV (x) | 6.4 | 5.3 | 4.5 | 3.8 |
| RoE (%) | 17.5 | 21.0 | 19.9 | 19.2 |
| RoCE (%) | 15.7 | 26.6 | 25.4 | 24.6 |
| EV/Sales (x) | 3.8 | 2.6 | 2.1 | 1.8 |
| EV/EBITDA (x) | 30.3 | 17.6 | 15.3 | 13.1 |
Source: Company, Angel Research
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