Revenue from operations during the quarter under review was at Rs 2778.82crore, drop of 13%. At the PBT before EO level, the company registered 22% drop in profits to Rs 504.34 crore.

The company witnessed drop in margins during the quarter. The decline in profit, as per the company, is mainly attributable tolower turnover, commodity price increase and

unfavorable forex.

"The automotive industry in India is going through a paradigm shift. Theslowdown is not cyclical, but structural. Shortage of liquidity accompanied with

build-up of inventory, will pose a big challenge and the recovery will take longerthan expected. With the outlook for this sector being extremely challenging, theimpact on structures, including surplus manpower, is already visible. At BoschLimited too, we have been investing in restructuring, to enhance efficiencies andto be fit for the future. While every opportunity will be extended for reskilling andredeployment, to align with adjustment of portfolios and competencies, there willbe manpower adjustments," said Soumitra Bhattacharya, the managing directorof Bosch.

"Bosch Limited is deeply committed to the future growth of India. Keyinvestments in future technologies and innovative solutions in the mobility and

non-mobility segments will continue. While doing this necessary coursecorrection measures will be taken in order to remain competitive in these

challenging times," added Mr. Bhattacharya.

Quarterly Performance

For thefirst quarter ended June 2019, the company's margins witnessed 220 bps drop mainly due to rise in employee and other expenses. Raw material cost including purchase of stocks decreased 440 bps to 53.5%. The employee cost (as a % of sales, net of stock) increased 300 bps to 13.08%. Other expense (as a % of sales, net of stock) increased by 180 bps to 15.7%. OPM during the quarter fell 220bpsto 17.4%(against 19.6%) leading to23%drop in operating profit to Rs 482.91 crore.

With 14% drop in other income at Rs 98.75 crore, PBIDT fell 22% to Rs 581.66crore. With negligible interest cost at Rs1.78 crore vis a vis Rs 1 crore in previous corresponding quarter and 20%drop in depreciation charges at Rs 75.54crore, profit before taxbefore EO fell 22%to Rs 504.34crore.The company had incurred an EO expense of Rs 82.1 crore in the previous corresponding quarter vis a vis nil this year. After almost 11 bps rise in effective tax rate and 35%drop in tax provision at Rs 142.29crore, net profit fell 35% to Rs 279.95crore.

The company has set up a provision of Rs 82 croretowards restructuring, reskilling and redeployment, that has been disclosed as anexceptional item for the quarter ended June 2019.

Bosch's automotive sales decreased 17.5% in Q1FY20. Domestic sales decreased 18.2% while export salesdeclined 8.6%. Though the Power Tools and Security Systems divisions disclosed positivegrowth, the company's non-automotive business posted a decline of 16.0%. This was primarily due to a drop in the energy services business.

The scrip is currently trading around Rs 13,700at BSE.