Bosch lines up Rs 160-200 crore capex for FY22; a multi-year low
The decline in capex for FY22 for Bosch comes on the back of 26 percent decline in net profit to Rs 480 crore for FY21 as against Rs 649 crore recorded in FY20
May 20, 2021 / 03:59 PM IST
Engineering and technology company Bosch will invest Rs 160-200 crore as capital expenditure (capex) for FY22, which would be one of the lowest for any year. The Bengaluru-based company used to incur a capex anywhere between Rs 350 crore to Rs 500 crore in previous years.
Soumitra Bhattacharya, managing director, Bosch said, “While capex for the Bosch India which is the group entity should be in the range of Rs 400-600 crore for Bosch Ltd it will be in the range of Rs 160-200 crore.”
In FY18 Bosch spent Rs 450 crore as capex which came down to Rs 399 crore in FY20. FY21 saw the steepest cut in Bosch’s capex to an estimated Rs 200 crore. The 50 percent cutback on capex for last year came after an 80 percent decline in net profit recorded in March 2020 quarter.
The decline in capex for FY22 for Bosch comes on the back of 26 percent decline in net profit to Rs 480 crore for FY21 as against Rs 649 crore recorded in FY20.
Bosch is one of the suppliers of semiconductors to the Indian automakers with one of its biggest client SUV specialist being Mahindra & Mahindra.
“We have to understand that the semiconductor shortage is not a local issue but a global issue. The chips come from outside of India which we procure before supplying them to our clients. There will be a chip shortage for the rest of 2021”, Bhattacharya added.
A brokerage note from HDFC Securities said, "Bosch is witnessing increased off-take in the engine and exhaust gas treatment systems. Supplies of fuel-injection systems to two-wheeler players provide an incremental opportunity. Bosch currently has an order book of around Rs 18,500 crore for BS-VI products, which would be executed over the next 5-6 years."
“It is readying solutions for emerging trends of connected vehicles (various cars with voice commands) and increasing digitization. Bosch India has been undergoing a massive restructuring (provided for around Rs 1,500 crore), which is now near completion; going forward, there’s only a marginal requirement for further provisioning,” HDFC Securities added.