Neutral Bosch; target of Rs 29540: Motilal Oswal

Motilal Oswal's research report on Bosch

Bosch’s (BOS) 1QFY25 performance was weak as EBITDA/PAT came in lower than expected at INR5.2b/INR4.7b (est. INR5.99b/INR5.4b), due to a higher import mix and other expenses (warranty provision). While the management focuses on boosting localization in the long term, it expects a rise in imports in the interim due to the transition to common rail systems. We cut our FY25E/26E EPS by ~8%/7% to reflect moderate demand in underlying industries and higher operating expenses. At ~44x/37.2x FY25E/FY26E EPS, the stock appears fairly valued. We reiterate our Neutral stance on the stock with a TP of INR29,540 (based on ~32x Jun’26E EPS).

Outlook

Given the weak 1Q, we lower our earnings estimates by 8%/7% for FY25/FY26. While BOS is outperforming the underlying auto industry growth with new order wins, visibility for margin recovering to 15-16% is low. At ~44x/37.2x FY25E/FY26E EPS, the stock appears fairly valued. Hence, we reiterate our Neutral rating with a TP of INR29,540 (premised on 32x June26E EPS)