Last Updated : Feb 18, 2019 04:01 PM IST | Source:

Hold Bosch; target of Rs 17565: ICICI Direct

ICICI Direct recommended hold rating on Bosch with a target price of Rs 17565 in its research report dated February 14, 2019.

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ICICI Direct's research report on Bosch

Bosch reported mixed Q3FY19 results. Revenues came in at Rs 3,096 crore (up 0.8% YoY). Gross revenues from the automotive segment (~80% of revenue) were flat YoY at Rs 2,537 crore, with the Powertrain Solutions business declining 2.7% YoY and the aftermarket division growing 5.8% YoY Gross revenue from the Non-automotive segment increased 4.8% YoY to Rs 596 crore, driven by double digit growth in security systems and solar energy division EBITDA declined 5.6% YoY to Rs 423 crore. Attendant EBITDA margins came in at 13.7% (down 92 bps YoY). The company reported higher other income, which was at Rs 179 crore & also incurred lower depreciation charges that positively impacted the profitability. Consequent PAT increased 19.3% YoY to Rs 335 crore Bosch is currently executing a buyback offer comprising 10.3 lakh shares at a maximum buyback price of Rs 21,000/share (aggregate amount: Rs 2157 crore) and is open from February 6-20, 2019.


Courtesy its strong parentage and history of technological expertise, Bosch continues to retain an advantage during times of disruption. It boasts of an unlevered, cash surplus B/S with healthy profitability (RoCE >20%). Incorporating the change in demand scenario domestically amidst muted global auto demand and limited scope for margin expansion (built in 90 bps over FY18-20E) due to competitive intensity going forward, we estimate sales, PAT CAGR at 10.6% YoY and 17.8% YoY, respectively, in FY18-20E. Valuing the company at its long period one year forward average P/E of ~28.2x, we arrive at a target price of Rs 17,565 on FY20E EPS of Rs 622.9 and maintain HOLD rating on the stock.

For all recommendations report, click here

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First Published on Feb 18, 2019 04:01 pm
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