Bosch India Sees EV Business Turning Significant In Two Years: MD Guruprasad Mud ...
After reporting a steady set of numbers for the March quarter, Bosch Limited finds itself navigating a complex mix of growth opportunities and global uncertainty. The technology and services supplier logged a 3 per cent rise in consolidated net profit to Rs 568.5 crore in Q4 FY26, even as revenue climbed to Rs 5,565.7 crore, led by decent momentum in its mobility, power solutions and two-wheeler businesses. The company also announced a new joint venture with TSF Group firms Wheels India Limited and Brakes India Private Limited to develop and manufacture commercial vehicle air system solutions, indicating a push to deepen local capabilities. However, a cautious outlook for FY27 due to geopolitical tensions seemed to have weighed on investor sentiment on Thursday post results announcement, sending Bosch shares down over 4 per cent.BW Businessworld spoke to Guruprasad Mudlapur, President, Bosch Group in India and Managing Director, Bosch Limited, on navigating supply chain risks, EV monetisation, intensifying competition, and why the company remains confident about its long-term India strategy. Excerpts:
There’s been a lot of conversation around global uncertainties for a couple of years now. What are the supply chain pressures playing out for Bosch India this year, given where we are with the West Asia crisis?
The headwinds and supply chain issues we talk about globally are the reality we go through on a daily basis. But the Indian business is pretty well isolated from this so far. We’ve had occasional challenges such as the Red Sea issue, immediate disruptions due to the closure of ports, or a conflict here and there. But apart from that, we’ve generally managed the Indian supply chain quite well.
There are things that are systemically changing. For example, we thought the semiconductor crisis was behind us, but now AI comes in and puts a huge demand on memory. And therefore we have to act to secure our supplies. There is a cost-point shift when we start to secure topics like this. We know that when the AI wave hits, there is going to be a huge demand on memory, and therefore memory will be in short supply for various other segments. Bosch has a global task force with regional representation built into it, so in that sense we are well protected and well managed.
"There are things that are systemically changing"
Locally, we’ve been able to forecast our markets well, our growth opportunities well, and therefore secure volumes quite well for our customers. So far, I would say well managed and well handled. That doesn’t mean a new crisis won’t appear. In today’s world we have to be very, very agile and vigilant.
Do you see this as a structural change or a cyclical one?
I would say this is much more structural than cyclical. From 2020 onwards, we seem to be seeing a series of global events that don’t let up. Tariffs came more recently, wars are going on, the US-China dynamic heats up and cools off and heats up again. Tariffs come in different forms, a lot of supply chain disruption. This seems much more structural in terms of how the new order will emerge. My personal opinion: I think it will take a while to stabilise.
Let’s talk about your Q4 results. Decent revenue numbers but profits were muted and that seemed to have brought the stock down about 4 per cent when markets opened after your results announcement. How do we read into it? Why is margin expansion looking limited?
We have continuously improved our margin over the last few years. Margins have been continuously on an upward track. And I think that trend we will stay on. So I do not see a margin pressure as such. We also have days when we see huge stock improvement on the positive side. There are days when things go in a different direction. I don’t yet know what triggered the move. Our team is looking into that.
It could be the cautious outlook we put out. And we won’t walk it back, because that truly is what we believe in. The stock will correct itself. We do what is necessary internally, and the value investors attach will come back.
How much of the growth was price-led versus volume-led this quarter, especially in your mobility solutions business?
It was largely volume-led and new feature- and content per vehicle-led. Very little to do with price.
Two-wheeler components were a standout this quarter and through the year. But that was partly on the back of the OBD-II compliance demand. As the base effect normalises going forward, do you see a demand cliff?
No, we don’t see a demand cliff. We may not see the 70 per cent step-jump again, because that is what it was, a step jump. But two-wheelers are a very core segment of mobility for a lot of Indians, and that segment has continuously performed well for us. Barring maybe one year, we’ve always had very good two-wheeler performance. And new features are coming in, new content is getting added onto two-wheelers as well. So we are very positive about the segment.
EV seems to be the big structural trend moving forward in auto. What is Bosch India’s thinking around EV monetisation? Do you see it becoming a material part of earnings in the near future?
Let’s take passenger cars as an example to ground the discussion somewhere. Volumes are at about 1,20,000-1,30,000 cars sold. A lot of those cars have their product lines brought in from somewhere in the world. That’s how it works today. The next generation of cars getting designed in India will have a lot more new designs, new local content, and other things coming in. That phase has just started, and it has started with virtually every OEM.
"We see that in two years from now, it (EV segment) will be material"
We see this trend picking up, and we see big opportunities for us there. That’s also the reason why we started the joint ventures, to build capacities together and build the scale to become a very large player in the e-axle market. We see that in two years from now, it will be material.
Competitors like Continental are doubling down in India, and there’s the China angle too. How are you addressing what looks like a very competitive market?
We have addressed the Continentals of this world for 100 years now. That’s our daily bread and butter. It’s not something that worries us. We have an excellent portfolio, great manufacturing depth, we are continuously innovating, very cost-competitive, and we have the widest and probably the best product portfolio.
In addition, whenever there is a crisis, as there is now, on virtually a monthly basis, we are the ones who stand out for OEMs as a reliable partner. Everybody who comes in and then falls apart, because they neither have the volumes nor the capability to manage such a crisis — OEMs then frequently come back to us and say, “Can you fill in for them? We went there, it didn't work.” So we are also very stable in terms of our outlook. Competition is good, it keeps us very active and energetic. But it’s not something that worries me too much.
There is a potential competition of a different nature altogether with Chinese players opening up. If you followed the Beijing Auto Show recently, the world is moving in a very different way out there — the pace of change, the scale of change, the technology being introduced, is very high and very fast. We are also playing very big in China, so we learn a lot there, and bring those learnings into different geographies.
What would your message be to investors looking at the cautious outlook you’ve put out?
Our investors are very mature. There may be some who act on the spur of the moment, but a lot of our investors and we talk to them on a very regular basis. They are not in it for one day or two. They are pretty long-term investors with us; they’ve been with us for a long time.
When we give guidance or when we give an outlook, we do it because we really believe there are headwinds in the market that we have to factor and manage well. I think they will understand that we are being proactive and very truthful in our representation of how we see the scenario. And I’m sure they will appreciate that, stay on, and come back even stronger.
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