Bosch Ltd (MICO) - ICICI Direct

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Exhibit 2: AssumptionCY11 CY12 CY13E CY14E CY15ERevenue (| crore)Automotive 7,241.4 7,728.5 7,841.4 8,469.6 9,677.5Non-automotive 847.4 977.1 1,098.5 1,241.7 1,443.1EBIT margins (%)Automotive 17.3 13.3 14.8 14.9 16.6Non-automotive 6.8 9.1 5.3 4.9 6.0Source: Company, ICICIdirect.com ResearchExhibit 3: Net sales and PAT margin trend(| crore)1200011000100009000800022.28,1668,6598,9319,7068.711,11614.525201510(%)700060006.03.155000CY11 CY12 CY13E CY14E CY15ETotal operating income % increase-Source: Company, ICICIdirect.com ResearchWith Bosch entering a high capex cycle, return ratios arelikely to remain healthy but below its routine range of~20% in the next two yearsExhibit 4: Return ratios profile262323.725.2(%)20171417.216.615.815.317.116.916.215.2CY11 CY12 CY13E CY14E CY15ERoERoCESource: Company, ICICIdirect.com Research * (net of Interest & Inter segment eliminations)ICICI Securities Ltd | Retail Equity Research Page 2
Bosch is the largest importer in the auto ancillary. Hence,it is impacted more by the volatility in the currencymarkets than other ancillary players. Over the years, netimports have crept up due to an increase in the tradedgoods component. For Bosch, a majority of the exposureis in the form of raw materials and traded goods while asmall portion is also from royalty and other technicalexpensesExhibit 5: Import content trending down(| crore)2,2001,8001,4001,00060020015.871817.583325.922.321.7 20.01,440CY08 CY09 CY10 CY11 CY12 CY13*2,0551,8771,75230262218(%)1410Net Forex Exposure% of SalesSource: Company, ICICIdirect.com Research * CY13 is estimatedKey management takeawaysThe management indicated that growth in Q3 was mainly driven by thetractor segment, which grew ~26% YoY at an industry level. The PV & UVsegments witnessed ~6% YoY growth on a low base with new productlaunches of Ecosport & Amaze. The HCV space continued to decline~33% YoY.Exports witnessed growth of ~19% YoY in Q3 and for nine monthsexports stood at | 777 crore in revenues. The domestic businesswitnessed growth of ~1.6% in Q3.On the exports front, the company said it was receiving a strong responseto its jointly developed baseline generators and expects to ramp upproduction for other markets considering the increase in competitivenessof the India business with INR depreciation.The company continued to highlight its target of ~| 600 crore capitalexpenditure in CY14E and ~| 500 crore in CY13E.On the forex exposure side, the management highlighted that net importexposure has come down to ~20% of net sales from ~22% in CY12.On content per vehicle, the management expects double digit kind ofgrowth in the coming three to five years but did not believe they coulddouble in the same period.The management believes the strong costs control, localisation, vendor &freight rationalisation along with management of manpower costs willhelp them remain at an optimal level of performance.ICICI Securities Ltd | Retail Equity Research Page 3
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Bosch Ltd (MICO) - ICICI Direct

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