The downturn in the automotive industry continued to adversely impact auto components major Bosch’s performance as the firm posted a decline both in its net profit and revenues in the third quarter ended December 2019 (Q3FY20).
The Bengaluru-headquartered firm posted 27.5 per cent decline year-on-year (YoY) basis in its profit before tax (PBT) at Rs 347.5 crore for Q3. Net profit declined 43 per cent at Rs 190.33 crore, during this period.
As the automotive industry goes through major disruption, Bosch also witnessed 15.7 per cent fall in its revenues from operations at Rs 2,537 crore, compared to Rs 3,007.8 crore a year ago. “The entire automobile industry is in the grip of a slowdown with a major technology shift from Bharat Stage (BS)-IV to BS-VI on the horizon. Together with OEMs ( original equipment manufacturers), Bosch has been working relentlessly to meet the April 1, 2020 deadline for the implementation of BS-Vl technologies," said Soumitra Bhattacharya, managing director of Bosch. “At the same time, we are continuing to invest in electrification and other mobility solutions,” he added.
According to the company, there was no let-off in the downturn, caused by cyclical and structural factors, mainly in the commercial vehicle and tractor segments.
In Q3, company’s revenues from mobility solutions decreased by 26 per cent as Powertrain Solutions division were affected by the slowdown. Similarly, Bosch’s business beyond mobility solutions sector posted a decline of 13.9 per cent on account of decline in solar energy division.
In Q3, the company made an additional provisioning of Rs 207 crore towards various restructuring and transformational projects initiatives. These are required to meet BS-VI emission standards. "These provisions are in line with the company’s transformation initiatives to capture the opportunities in the emerging electro mobility and mobility segment,” the company said.
Bosch, which makes a wide range of auto products including braking systems and batteries, has been restructuring business since June because of the slowdown. While it suspended work in some units for few weeks, there were reports of human resources optimisation.
Globally, Bosch is also rationalisating its workforce because of fall in demand for diesel and petrol vehicles.