Skip to main content

Stock review: BOSCH


Bosch, a leading automotive car component maker, has been reaping the benefits of a strong revival in demand for automobiles, especially for commercial vehicles that form a large chunk of its business. For the year ended December 2010, the firm clocked a double-digit growth in net profit in line with the performance of some other large auto component makers, like Motherson Sumi Systems. Bosch, the Indian arm of German engineering firm, has sustained a 30% year-on-year revenue growth in each of the past four quarters. Being debt-free, it is also able to shield itself from rising borrowing costs, unlike some of the auto ancillary makers. The growth in topline was supported by almost a two-fold increase in commercial vehicle sales to 9.8 lakh in the past one year, besides a strong growth in the passenger car segment.


In the December 2010 quarter, sales grew 33% over the yearago period, matching the performance in the third quarter. However, the company's operating margin contracted 200 basis points to 18% during the quarter due to a rise in the raw material expense compared with the corresponding period of the previous year. But due to a lower in-crease in depreciation and higher interest earnings, the firm recorded a 45% growth in the net profit over the year-ago period.


According to stock brokers' reports, Bosch is expected to report a compounded annual growth of 26% in revenues for the next two calendar years beginning 2011 while net profit will grow 30% in the same period due to a better sales outlook for commercial vehicles.
Bosch plans to invest in upcoming segments, like hybrid technology, which can act as a new growth avenue in the coming years, even though it's too early to ascertain revenues from such investment bets.


The stock has outperformed the 10-stock ET Auto Ancillary index in the past one year. This can be attributed to its consistent business growth, besides leadership in the segment of diesel systems of commercial vehicle.


At the market price of . 6,080, the scrip trades at 23 times its earnings for the past 12 months, which is slightly higher than the industry average of 20. But Bosch typically commands premium in the market due to its healthy operating cash flows.

Popular posts from this blog

Impact of Demonetization

Impact of Demonetization:   ·          Improvement in Government's fiscal position going forward:   Ø   Higher benefits for the Government if lesser currency notes comes back into the system Ø   Increase in Tax Reporting leading to better revenue hence better fiscal   ·          System Liquidity to increase going forward ·          Inflation expected to fall further ·          Growth to be positively impacted over medium to long term with near term hiccups   Duration Funds:   In light of the above facts and expectations investors may consider long duration funds ( Reliance Dynamic Bond Fund, Reliance Income Fund & Reliance Gilt Securities Fund ) as these funds would benefit on further easing of yields over next 12 to 18 months.   'Reliance Dynamic Bond Fund' aims at generating returns even in stable interest rate markets by exploring different trading strategies. The strategy to differentiate Tactical Positions f...

Tata Fixed Income Portfolio Fund dividend

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)       Tata Mutual Fund has announced dividend under the dividend option of Tata Fixed Income Portfolio Scheme B2 Plan A-DQ, Tata Fixed Income Portfolio Scheme B2 Reg-DQ and Tata Fixed Income Portfolio Scheme B2 Direct-DQ. The record date has been fixed as August 29, 2013. Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com --------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C. Invest Tax Saving Mutual Funds Onlin...

Nomination in Investment

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Nomination in investment   As an investor, you spend most of your precious time in deciding on your investments, their tenure, and the returns that your invested money will fetch practically. Do you know who gets your investment money when you are "no more"? I am sure most of you must have come across the 'nominations' column, while filling any of your financial application form, be it that for a Mutual Fund, or a Demat Account, or simply a Bank Account. More often, people have a tendency to leave the nomination field blank, or fill the same uncertainly, without even understanding the big importance of this little detail. Here, let us try to put forth the significance of a nomination into our financial lives. What is nomination? A person to wh...

How to gauge the risk profile of your mutual fund portfolio?

MUTUAL funds are considered to be an investment option for those who do not generally devote a lot of time to monitoring and managing their portfolios. Investors experience both good as well as tough times as far as mutual fund investments are concerned. But while evaluating the portfolio of their equity mutual fund holdings there are a few points that one should check to know about the level of risk that they are facing. Often there are situations where there is a higher risk than what was estimated initially. Here are a few ways to evaluate various risk levels. Individual holding exposure : The portfolio of the equity fund where one has invested or plans to invest needs to be scrutinised to see whether the risk levels are such that could lead to a larger volatility in the holdings. Depending upon this factor and the risk taking ability of the investor the choice about a particular fund as an investment should be made. One key point to watch out is whether there is a large ex...

Stick to Good Fund Manager who Can Multiply Your Investment

A manager may be the difference between the best and worst funds. Here's how you can find the right one    Does a mutual fund manager make a difference to your investment? The answer may not be as easy as you think, since most best-performing mutual funds have moved away from individualistic fund management to process-driven methods, limiting the scope of an individual's role in investment decisions. In fact, many fund managers would speak at length about how the "system" their fund house has in place makes their task of picking stocks easy even though it restricts their freedom. Still, the question is important, especially after recent reports that the Securities and Exchange Board of India ( Sebi ) may ask fund managers to disclose to investors their track record of managing money. Let us take a look at the universe of large-cap funds over the past five years. According to Value Research, an independent mutual fund tracking firm, the topper in the category is DSP...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now