Higher interest cost and higher tax provision coupled with lower other income truncated bottomline growth. OPM during Q4 FY 17 witnessed good improvement. PBT registered 9% growth to Rs 662 crore during the quarter.

The increase in profit is mainly due to favorable product mix, increased operational efficiencies and productivity increase.

"Bosch Limited's business grew well above the production volumes of the domestic automotive market, both in the current quarter and the complete year. Exports declined due to weak demand from our overseas markets," said, Mr. Soumitra Bhattacharya, managing director, Bosch.

Quarterly Performance

For the fourth quarter ended March 2017, the company's margins witnessed 460 bps rise, mainly due to drop in raw material including purchase of stock cost and drop in employee expenses. Raw material cost including purchase of stocks decreased 240 bps to 48.8%. The employee cost (as a % of sales, net of stock) decreased 330 bps to 10.7%. Other expense (as a % of sales, net of stock) increased by 130 bps to 13.8%. OPM during the quarter rose to 27.3%(against 22.7%) leading to a 24%rise in operating profit to Rs703.71crore.

With 25% dropin other income at Rs131 crore, PBIDT rose 12% to Rs835crore. With six fold rise in interest cost of Rs23.22 crorevis a vis Rs4 crore in previous corresponding quarter and 13%rise in depreciation charges at Rs149 crore, profit before tax rose 9% to Rs662 crore.

After almost 1150 bps risein effective tax rate and 64%rise in tax provision at Rs222 crore, net profit fell 7% to Rs440.47 crore.

The mobility solutions sector grew by 4.3% during the quarter. Within the segment of Mobility Solutions, Gasoline Systems and Two-wheeler businesses registered double-digit growth.Business beyond Mobility Solutions grew by 17.2%, growth was mainly registered in business units such as, Security Systems, ATMO, and Energy and Building Solutions businesses.

Annual Performance

For the year ended March 2017, net sales rose 8% at Rs10,435 crore. The company's margins witnessed 60 bps drop, mainly due to rise in raw material including purchase of stock cost and rise in other expenses. Raw material cost including purchase of stocks increased 60 bps to 51.4%. The employee cost (as a % of sales, net of stock) decreased 80 bps to 12.7%. Other expense (as a % of sales, net of stock) increased by 110 bps to 17.2%. OPM during FY 16-17fell to 18.8% (against 19.4%) leading to 4%rise in operating profit to Rs1960crore.

With 2% rise in other income at Rs617 crore, PBIDT rose 4% to Rs2577.75crore. With interest cost of Rs27.15 crore vis a vis Rs12.93 crore in previous year and 18% rise in depreciation charges at Rs456.23 crore, profit before tax rose 1% to Rs 2094 crore.

After almost 370 bps rise in effective tax rate and 14%rise in tax provision at Rs650.3 crore, net profit fell 5% to Rs1444 crore.

For the financial year 2016-17, Bosch Limited's Mobility Solutions sector grew by 5.9%. The domestic business developed strongly and increased by 8.6% outperforming the domestic automotive market which grew by seven percent in the same period. Within the Mobility Solutions business, the Gasoline Systems business registered a strong double-digit growth. The Two-wheeler business also performed well registering considerable growth mainly arising from domestic market.The business sectors beyond Mobility Solutions posted double-digit growth of 16.8%. Growth was driven by the Security Systems, Packaging, and Energy and Building Solutions businesses of Bosch.

Speaking of the outlook for 2017, Mr. Bhattacharya further commented, "We continue to remain cautiously optimistic about the current financial year, while adopting necessary course correction. A progressive government focused on reforms, reducing interest rates, expectations of a normal monsoon and improved liquidity post re-monetization, substantiates our current outlook. These factors have also helped improve market sentiment." Additionally key reforms like Goods and Service Tax (GST), smart cities and stable political situation will contribute to moderate growth both in the automotive as well as non-automotive sector.

Adding further he mentioned, "The proposed roll out of GST by July 01, 2017 is expected to have a short-term disturbance, however, in the mid- and long-term it will help the growth story of India. Bosch India is well prepared for GST led by an excellent cross-functional team."

On May 22, 2017the management of Bosch broke ground at Bidadi for the development of the second phase. Expected to be completed by mid of 2019, the second phase of Bidadi will have the capacity to accommodate around 2,500 associates. A powertrain plant, Bidadi will primarily manufacture new generation and conventional fuel injection products and components.

During the last 12 months, major investments were made towards development of new products and facilities in Bidadi and Nashik. Overall the company made capital investments of around INR 630 crores in 2016-17.

The scrip is trading around Rs 24,000 at BSE.