Kolkata, Nov 07 (GCBusiness) Bosch Limited, a leading supplier of technology and services, posted total revenue from operations of Rs 2,313 crores in Quarter 2 of FY 2019-20, registering a decline of 26.9 percent over the same period previous year.
The drop is mainly driven by continuing cyclical and structural issues adversely impacting the auto sector.
The Profit before Tax (PBT) before exceptional item from continuing operations stood at Rs 421 crores which is a decline of 34.4 per cent over the same period of previous year.
The Profit before tax after exceptional item stood at Rs 291 crores which is 12.6 per cent of total revenue from operations.
With the Indian automotive market undergoing major changes from regulatory, technological and market factors, there are opportunities in new segments of electro mobility and mobility solutions.
The Company has set up an additional provision of INR 130 crores, disclosed as an exceptional item for the quarter ended September 30, 2019 towards various continuing transformational projects.
In accordance with the approvals received from the Board of Directors on May 21, 2019 and from the shareholders on August 23, 2019, the company has executed the business transfer agreement on October 1, 2019 and transfer of the business of Packaging division.
Consequently, the profit before and after tax of this division has been disclosed separately as discontinuing operations.
The Company has exercised the option of concessional tax rate of 22 percent plus applicable surcharge and cess for domestic companies. Consequently, wherever applicable the opening deferred tax asset (net) has been measured at the lower rate, with a onetime corresponding charge of INR 145 crores to the Statement of Profit and Loss.
The Profit after Tax before exceptional item and onetime tax charge stood at 14.8 percent.
The Profit after Tax (PAT) from continuing operations including exceptional item but before onetime tax charge stood at 10.7 per cent. The profit after Tax (PAT) from continuing operations stood at 4.5 per cent.
Total net profit after tax including discontinuing operations stood at Rs 99 crores.
For the half-year ended September 30, 2019, Bosch Limited posted a total revenue from operations of Rs 5,068 crores, a decline of 20.2 percent over the same period of previous year. PBT for continuing operations stood at Rs 928 crores and PBT after exceptional item stood at Rs 716 crores.
PAT for continuing operations stood at Rs 384 crores after exceptional items. Profit after tax for the period including discontinuing operations stood at INR 379 crores.
“The dip in the company’s performance is mainly due to the downward trend in the automotive sector as a whole, which has been caused not only by sluggish demand but also by a paradigm shift in consumer behavior. To deal with this, the company has initiated a restructuring process. Wherever possible, the company wants to focus on reskilling and redeploying talented associates. Any necessary headcount adjustments will be carried out in a fair and socially acceptable manner, and will also include early voluntary retirement schemes,” said Soumitra Bhattacharya, the managing director of Bosch Limited and president of the Bosch India Group.
Commenting on recent developments, Bhattacharya added: “The announcement made by Prime Minister Modi about the coexistence of combustion-engine and electric vehicles is definitely reassuring for the automotive industry. At Bosch Limited, we have been investing steadily in developing products and solutions for the mobility of the future while enhancing our combustion-engine technologies. The company is already working with vehicle makers on the electrification of the two-, three-, and four-wheeler segments including mobility services.”
Snapshot of business divisions’ performance in Quarter 2
Bosch Limited Mobility Solutions turnover decreased by 30.6 percent in Quarter 2 of FY 2019-20, mainly driven by Powertrain Solutions division affected by auto sector slowdown.
Bosch’s business beyond Mobility Solutions sector posted a decline of 9.5 percent. The reduction is on account of decline in business of solar energy and security technologies division which are mainly project driven.
For the first half business year ended September 30, 2019, total turnover has declined by 22.5 percent. Sales of Mobility Solutions sector decreased by 24.0 percent whereas business beyond Mobility Solutions sector witnessed a reduction of 12.8 percent.