MOSL: BOSCH (Neutral)- In-line-Higher other income, lower depreciation boosts PAT

Bosch: In-line; Higher other income, lower depreciation boosts PAT

(BOS IN, Mkt Cap USD8.1b, CMP INR19448, TP INR20302, 4% Upside, Neutral)

• Revenue higher than estimate: Revenues grew +14% YoY (flat QoQ) to INR32b (our est. INR30.4b). Auto revenue grew 12.3% YoY, whereas non-auto segment grew 14.3% YoY (driven by energy and power tools business). Domestic revenue grew 16% YoY, while exports declined by 14% YoY.
• Margin impacted by RM: EBITDA grew 17% YoY (-5% QoQ) to INR6b (in-line). EBITDA margin contracted 90bp QoQ (+60bp YoY) to 18.6% (v/s est. 19.7%), as RM cost was higher at 56.7% (+230bp QoQ), impacted by adverse forex and additional cost of importing fuel injectors. Lower depreciation and higher other income boosted PAT growth of 19% YoY to INR4.2b (v/s est. INR4b).
• In 1HFY19, Revenue/PAT grew 17%/30% demanding residual growth of 12%/15%, respectively, in 2HFY19.
• BOS has approved buyback of up to 1.028m shares (~3.37% of share capital) at a price of INR21,000/share, aggregating to INR21.6b (cash and investments of ~INR75b). Promoter has signified its intention to participate in the buyback.