ICICI Direct is bearish on Bosch has recommended sell rating on the stock with a target price of Rs 10,950 in its research report dated August 12, 2020.
ICICI Direct's research report on Bosch
Bosch Ltd reported subdued Q1FY21 results, outperforming OEM volumes for the quarter courtesy increase in content/vehicle. Net revenues came in at Rs 992 crore (down 64% YoY), with automotive revenues down 65.6% YoY to Rs 813 crore. Revenues of powertrain solutions fell 78.3% YoY while revenue of ex-mobility solutions business fell 60% YoY. The company reported loss at EBITDA level of Rs 103 crore, with automotive EBIT loss at Rs 309 crore. All chief cost items rose on percentage of sales basis. Consequent reported loss at PAT level was at Rs 121 crore vs. profit of Rs 282 crore in Q1FY20. Bosch continued to book exceptional charges towards restructuring and transformational projects amid structural and cyclical changes in the automotive sector, which for the quarter was at Rs 197 crore.
Outlook
We continue to maintain cautious stance on Bosch, primarily due to demand challenges given its high exposure to CV space, assign SELL post sharp rally in past few months. We value it at Rs 10,950 i.e. 27x FY22E EPS of Rs 406/share.
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