Mehabe score: 3 G Factor: 3 Piotski Score: 6 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 6.
Description
Bosch Ltd has presence across automotive technology, industrial technology, consumer goods and energy and building technology. It manufactures and trades in products such as diesel and gasoline fuel injection systems, automotive aftermarket products, industrial equipment, electrical power tools, security systems and industrial and consumer energy products and solutions.
Main Points
Mobility Solutions (59% of revenues)#
1. Powertrain Solutions : It offers integrated solutions in the market segments – electric vehicles, passenger cars, Commercial vehicles, off-road vehicles, etc.
It aims at becoming leading provider of products and solutions in the diversified powertrain sector ranging from gasoline and diesel injection to electrified drives with battery and fuel technologies.Site:BOSCHLTDMain Symbol:BOSCHLTD
Stock trades at 15337.0, above its 50dma 15098.13. It also trades above its 200dma 14315.53. The stock remains bullish on techicals
The 52 week high is at 16900.00 and the 52week low is at 11265.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has been maintaining a healthy dividend payout of 45.82%
Weakness
– The company has delivered a poor sales growth of 0.03% over past five years.
-Tax rate seems low
– has a low return on equity of 13.00% for last 3 years.
Competition
– The industry trades at a mean P/E of 33.5x. WABCO India trades at the industry’s max P/E of 134.27x. BOSCHLTD trades at a P/E of 46.5x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 7.0. BOSCHLTD has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 0.7%. The max 1- month return was given by Minda Industries: a return of 11.72 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 3216.0 cr compared to Rs 2237.0 cr for period ended Mar 2020, a rise of 43.8%
Operating Profits reported at Rs 619.0 cr for period ended Mar 2021 vis-vis 341.0 for period ended Mar 2020 .
Operating Margins expanded 400.4 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 163.82 compared to Rs 62.47 for previous quarter ended Dec 2020 and Rs 27.43 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 9716.0 cr for period ended Mar 2021 vis-vis sales of Rs 9842.0 cr for the period ended Mar 2020, a fall of 1.3%. The 3 year sales cagr stood at -6.0%.
Operating margins shrank to 12.0% for period ended Mar 2021 vis-vis 15.0% for period ended Mar 2020, contraction of 300.0 bps.
Net Profit reported at Rs 482.0 cr for period ended Mar 2021 vis-vis sales of Rs 650.0 cr for the period ended Mar 2020, falling 34.9%.
Company reported a poor Net Profit CAGR of -29.4% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 18% on a 1 Year basis vis-vis a return of -4% over the last 3 Years. – The compounded sales growth on a TTM bassis is -1% vis-vis a compounded sales growth of -6% over the last 3 Years. – The compounded profit growth on a TTM basis is -12% vis-vis a compounded profit growth of -12% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 4.33% vis-vis 4.64% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 8.94% vis-vis 9.12% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
– has been maintaining a healthy dividend payout of 45.82% – The company has delivered a poor sales growth of 0.03% over past five years.
-Tax rate seems low
– has a low return on equity of 13.00% for last 3 years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 15098.13 and is trading at 15337.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
