Revenue from operations during the quarter under review was at Rs 2,811.85 crore, rise of 7%.

Weak operational performance coupled with lower other income and higher depreciation charges truncated bottomline growth. OPM during Q2 FY 18 witnessed decline. Margins declined due to higher material cost due to change in product mix consequent to change in Emission norms to BSIV from April, 2017.

"Earlier this year, the central government passed the mandate for all vehicles to changeover from BS III emission norms to BS IV emission standards. Bosch Limited was able to offer its customers the required technology by ramping up its production and outperformed the growth of the Indian automotive sector", stated Mr. Soumitra Bhattacharya, managing director, Bosch Limited, and president Bosch Group in India, while announcing the results for the quarter. "Looking forward, the company is well prepared to offer customers an array of full line solutions, as the nation transitions from BS IV to BS VI emission norms by 2020. Bosch Limited is confident and committed to offer its support during this phase of movement," Mr. Bhattacharya continued.

"The current fiscal year holds many promises. With a progressive Government at the centre we look forward to more reforms. By taking a consolidated approach to customer service and delivering holistic integrated services, Bosch Limited is certain of continuing on the path of its past growth trajectory," Mr. Bhattacharya commented.

Quarterly Performance

For the secondquarter ended Sept 2017, the company's margins witnessed 60 bps drop, mainly due to rise in raw material expenses. Raw material cost including purchase of stocks increased 500 bps to 55.3%. The employee cost (as a % of sales, net of stock) decreased 100 bps to 12.1%. Other expense (as a % of sales, net of stock) decreased by 350 bps to 14.5%. OPM during the quarter fell to 18.1%(against 18.6%) leading to3%rise in operating profit to Rs 508crore.

With 32% dropin other income at Rs 129.03 crore, PBIDT fell 6% to Rs 636.99crore. With negligible interest cost at Rs 3 lakh vis a vis Rs 97 lakh in previous corresponding quarter and 25%rise in depreciation charges at Rs 110.81 crore, profit before tax fell 11% to Rs 526 crore.

After almost 450 bps risein effective tax rate and 3%rise in tax provision at Rs 172.81 crore, net profit fell 16% to Rs 353.34 crore.

Overall, Bosch Limited's Mobility Solutions businesses grew by 8.8% and outperformed the automotive market which grew by 6.6% (excluding two-wheelers) in this period. Key performing divisions were the Gasoline Systems division registering a growth of 30.8%. The Diesel Systems business division registered a similarly significant growth of 27% supported by the local automotive market growth of 6.6% and an impressive double-digit growth in commercial vehicles segment and tractors, supported by a good monsoon. The Automotive Aftermarket division witnessed a decline of 8.6% due to GST roll out and post stabilization issues.

The company's business beyond mobility sector registered an overall growth of 6.7% compared to the previous quarter. This was attributed to good business in Security Technology and Energy & Building Solutions divisions. The Thermotechnology division also executed higher export sales orders.

Half Year Performance:

Sales for half year ended Sept 17 grew 6% to Rs 5460.2 crore. The company's margins witnessed 130 bps drop, mainly due to rise in raw material expenses. Raw material cost including purchase of stocks increased 230 bps to 54.2%. The employee cost (as a % of sales, net of stock) increased 6 bps to 12.7%. Other expense (as a % of sales, net of stock) decreased by 170 bps to 15.5%. OPM during the quarter fell to 17.3% (against 18.6%) leading to 2%drop in operating profit to Rs 946.99crore.

With 25% drop in other income at Rs 258.6 crore, PBIDT fell 8% to Rs 1205.55crore. With negligible interest cost at Rs 54 lakh vis a vis Rs 2.24 crore in previous corresponding period, and 24% rise in depreciation charges at Rs 217.05 crore, profit before tax fell 13% to Rs 987.96 crore.

After almost 410 bps rise in effective tax rate and 1%drop in tax provision at Rs 332.01 crore, net profit fell 18% to Rs 655.95 crore.

The scrip is currently trading around Rs 19,280 at BSE.