Bosch has slashed its capital expenditure (capex) by half for FY21, hit by the ensuing slowdown because of the coronavirus pandemic.
"We have reduced capex substantially for non-essential need. In the last five years Bosch has had capex between Rs 350 and Rs 500 crore per year and we are approximately keeping 40-50 reduction on this," said Soumitra Bhattacharya, Managing Director, Bosch.
During FY20, Bosch made investments of Rs 399 crore.
Bhattacharya was speaking after Bosch posted 80 percent decline in net profit for the quarter ended March to Rs 80.9 crore compared to the same quarter last year. The company operates 18 plants, 15 legal entities and employs the highest number of engineers outside of Germany.
"We have kept capex for our Adugodi campus because that’s something we want to complete as a smart campus we have kept capex for our future projects be it in mobility solutions or electrifications or other areas and yet we have reduced it substantially," Bhattacharya said.
Like many of its peers, Bosch has restarted operations at many of its plants after a gap of more than 40 days but scores of its engineers continue to work from home.
"April has been a wipeout for the whole industry and Bosch is not an exception. May will be a slow starter and June, I estimate, that the whole industry will not be doing more than 25 percent (in peak capacity) at best. So we will follow the industry in a similar manner," added Bhattacharya.
Bosch has made a provision of Rs 717 crore, towards various restructuring, reskilling, redeployment initiatives and for BS-IV parts.
"These provisions are in line with the company’s transformation initiatives and has been made to capitalize on opportunities emerging in electromobility and other mobility related projects," the company said.
"We will need multiple years of growth to come back to the peaks of 2018 and unless there is a intervention by the government on direct stimulus for the industry this could stretch for a long time. However, at Bosch we are confident that we will bounce back in 2022-23, 2023-24 to our original levels and climb further," Bhattacharya added.Follow our full coverage of the coronavirus outbreak here