Bosch Limited
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Post subsidy adjustments, the two-wheeler demand has recovered. We see consistent demand for EV cars in passenger segments. We will focus on our portfolio engagement in both segments and monitor the market for specifics on portfolio enlargement.
We see an increase in the share of traded goods affecting gross margins. Localization efforts, especially in heavy commercial vehicles, are underway, and we are planning further steps in exhaust gas treatment. However, improvements in gross margins will be midterm due to the complexity of technologies.
For FY '24, we estimate a capex of 3.5 billion. For FY '25, we are in the middle of midterm planning.
Yes, Bosch will be localizing EGT components, which will lead to a lower share of traded goods.
The growth disconnect is due to a better performance in the premium segment of two-wheelers, where Bosch has a stronger presence, while the commuter segment is facing distress.
Bosch has qualified for the PLI scheme and plans to increase local manufacturing. Benefits will be shared with customers where required, but specifics are not finalized yet.
We see a slow recovery in the commercial vehicle sector after a downturn. Infrastructure investments will be crucial, and we will monitor the market closely.
The share of traded goods has decreased, but the mix and terms of trade have changed post BS-VI. Capex for localization is expected to increase significantly in the coming years.
The extent of exposure depends on category to category. A vehicle manufacturer has more avenues for recovering cost impacts compared to a Tier 1 supplier like us. This will be a continuous challenge in the coming quarters.
The planned capex for 2024 is around 3.5 billion to 3.6 billion, mainly focused on our plants to support our localization strategy, including investments in machinery.
We have a good liquidity position and are looking at both organic and inorganic growth opportunities. We are also monitoring market trends in electrification and hydrogen.
The initiatives on personnel costs were right, and we are currently at 8.1% of revenues. However, material costs have increased due to the transition from BS-IV to BS-VI, and we are working on localization to improve margins.
The global economic situation is challenging, with weak markets in Europe and the US. While exports are a chance, the current market conditions limit our ability to capitalize on them.
We do not prioritize one over the other. Both hydrogen ICE and electrification are important, with hydrogen ICE expected to be deployed beyond 2026, while electrification is already present in some segments.
We offer a global portfolio of products and technologies to Indian OEMs, and we also customize these technologies as needed. We are working on adapting technologies like drive-assist and emergency braking for the Indian market.
Yes, once EGT is localized, it will be part of the listed entity's sales and margins, rather than being treated as traded goods.