New Delhi: The Capex plan of Bosch India is expected to be in the range of INR 160 crore –INR 200 crore for the financial year 2021-22, a top company official said.
“Bosch India which is a group entity of 16 companies used to spend INR 400crore –INR 600 crore. For FY22 Bosch Ltd (which comprises the mobility division) we are estimating the Capex to be in the vicinity of INR 160 -INR200 crore. It will largely go towards plant expansion and localisation,” Soumitra Bhattacharya, managing director, Bosch Limited and president of Bosch India, told ETAuto.
Notably, the current Capex plan is one of its lowest in recent years. The company, which derives 80% of its revenue through mobility business, acknowledged that the second wave of COVID-19 will adversely affect its future plans.
It had budgeted a Capex of around INR 450 crore – INR 460 crore for FY17 and FY18 respectively out of which the company spent about 15% in R&D activities. In FY20, the company spent INR 399 crore with a major chunk spent on the expansion of the Bidadi plant and construction of the Adugodi campus in Bengaluru.
Hit by slowdown in the automotive sector, Bosch reduced its capital expenditure by 40%-50% for FY21 and invested around INR 200 crore.
“The auto industry was seeing itself on a road to recovery until early this year and Bosch Limited’s positive result is a validation to it. However, with the second wave being more severe, there is a clear uncertainty in the market. The challenge will be to manage the fluctuating demand, supply chain crisis and changing consumer behavior all at once,” Bhattacharya added.
In the Q4 of FY21, the auto component maker reported a six-fold increase in its consolidated net profit to INR 482 crore on the back of robust auto sales. The company had posted a net profit of INR 81 crore during the January-March quarter of 2019-20.
The auto industry was seeing itself on a road of recovery until early this year and Bosch Limited’s positive results is a validation to it. However, with the second wave being more severe, there is a clear uncertainty in the market. The challenge will be to manage the fluctuating demand, supply chain crisis and changing consumer behavior all at onceSoumitra Bhattacharya, Managing Director, Bosch Limited and President of Bosch India
Meanwhile, its consolidated revenue from operations went up to INR 3,218 crore during the fourth quarter as against INR 2,237 crore in the same period of FY20. However, for the overall FY21, the company’s consolidated net profit fell 25.8% at INR 482 crore as against INR 650 crore in 2019-20 financial year. Consolidated revenue for operations for FY 21 stood at INR 9,716 crore, down 1.3%, compared with INR 9,842 crore in FY20.
Chip shortage continue to take a toll
According to Bhattacharya the wind storm in Texas and a fire in Japan that had hit production at prime semiconductor suppliers will continue to impact the crucial supply of chips to the automotive industry throughout this year.
“Yes we see a challenge most likely for the full calendar year of 2021. It is not that the OEMs are not getting volumes, the issue is they are getting fewer volumes than the demand. Chip shortage has become an acute problem worldwide,” the Bosch India president added.
He also noted that the sporadic lockdowns are creating supply chain disruption which will likely continue in the coming months. Last week, the company suspended operations at its Nashik plant from noon till the midnight of May 23 to adhere to the state government directives to break the transmission chain amid the surge in COVID-19 cases.
The company’s Nashik plant caters to common rail systems with a key portfolio of injectors and nozzles for passenger cars, heavy and commercial vehicles, and tractor segments.
