BOSCH HOME COMFORT INDIA LIMITED — Q3 FY26

Bosch Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=STRnvPvbo7c Published: 3 months ago

0:02 2 seconds J we are ready we can begin. 0:08 8 seconds Uh ladies and gentlemen good day and welcome to Bart Limited 3Q fi 2526 post 0:16 16 seconds conference call hosted by BNK securities from B management we have with us today Mr. Gurup Prada Mudapur managing director and chief technology officer. 0:26 26 seconds This is Karan Gil's chief financial officer. At this point all participant Ryan will be in the listen only mode and there will be an opportunity for to ask 0:34 34 seconds questions after the management presentation and opening remarks. Over to you sir. 0:41 41 seconds Okay. Thank you uh and uh good afternoon everyone and welcome to our Q3 FI26 uh 0:48 48 seconds earnings uh conference call. Uh we'll begin today with uh a macroeconomic overview followed by an update on uh the 0:56 56 seconds auto market. From uh there I'll walk you through our uh financial performance for the quarter and conclude with uh key 1:03 1 minute, 3 seconds business highlights. We will uh then open for the call for a Q&A session. Uh 1:09 1 minute, 9 seconds the g global economy is adjusting to a landscape reshaped by uh geopolitical events and realignments in the trade 1:18 1 minute, 18 seconds relationships among uh countries. Uh 2:39 2 minutes, 39 seconds We could not hear you your voice. Hello. 2:50 2 minutes, 50 seconds Uh hello. 2:56 2 minutes, 56 seconds Uh, 5:23 5 minutes, 23 seconds Yeah, management is reconnecting. 5:30 5 minutes, 30 seconds Yeah, sorry. Uh, sorry about Yeah. Yeah. I think we missed missed you totally, sir. We can I have to start from the start, sir. 5:37 5 minutes, 37 seconds Yeah. Yeah, sure. I'll do that. I'll do that. Yeah. Sorry. Yeah. 5:41 5 minutes, 41 seconds No problem. Yeah. Thank you. Uh uh sorry again. Uh I'm going to start uh uh one more time. Uh I'm uh hoping this works 5:50 5 minutes, 50 seconds better. Uh good afternoon everyone and uh welcome to our Q3 uh um FI26 earnings 5:58 5 minutes, 58 seconds conference call. We'll begin today with uh the macroeconomic overview followed by an update on the automotive market. 6:06 6 minutes, 6 seconds From there I'll walk you through the financial performance for the quarter and conclude uh with key business highlights. 6:13 6 minutes, 13 seconds We will then open uh the call for a Q&A session. Uh the global economy is adjusting to a landscape reshaped by 6:21 6 minutes, 21 seconds geopolitical events and realignments in the trade relationships among countries. 6:27 6 minutes, 27 seconds There was tempering of higher tariffs in few cases due to which subsequent resets uh due to subsequent resets in deals. 6:37 6 minutes, 37 seconds However, the overall business environment remains volatile. As per uh International Monetary Fund, the global 6:45 6 minutes, 45 seconds growth is projected to slow down from 3.2% in 2025 to 3.1% in 2026. 6:53 6 minutes, 53 seconds The closer home, the Indian economy continues to demonstrate powerful resilience and showcases higher growth 7:00 7 minutes compared to its peers. uh the IMF has revised upwards its estimate of uh India's GDP growth in the current 7:09 7 minutes, 9 seconds financial year 202526 to 7.3% from its earlier prediction of 6.6% 7:18 7 minutes, 18 seconds attributed to resilient uh domestic demand and easing inflation. India also benefits from tailwinds to be gained 7:26 7 minutes, 26 seconds from uh the now agreed FDA with the EU and the handshake on the trade deal with US and other regions uh including 7:35 7 minutes, 35 seconds Australia, UK and uh New Zealand. Uh with the RBI maintaining a stable 5.25% 25% report rate. We see continued 7:44 7 minutes, 44 seconds strength in domestic demand across the passenger and commercial vehicle segments especially 7:51 7 minutes, 51 seconds with expectation of transmission of earlier rate cuts by RPI. 7:57 7 minutes, 57 seconds The Union budget 2026 27 presented earlier this month sends a strong and reassuring signal of policy continuity 8:05 8 minutes, 5 seconds and intent for India's manufacturing le growth and is set to maintain the automotive industries's growth momentum 8:14 8 minutes, 14 seconds through key measures like uh extension of basic customs duty exemptions on lithium ion cell components for 8:22 8 minutes, 22 seconds batteries launch of the India semiconductor mission 2.0 zero uh support for mineralrich states of Odisa, 8:31 8 minutes, 31 seconds Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare earth corridors to promote mining, 8:39 8 minutes, 39 seconds processing uh research and manufacturing and um continued investment in infrastructure including a new freight corridor. 8:50 8 minutes, 50 seconds Building on these uh supportive policy tailwinds, we are confident that the automotive and other supporting industries growth outlook remains robust. Next slide please. 9:03 9 minutes, 3 seconds India's automotive production remained robust in the October December quarter driven by broadbased strength across 9:10 9 minutes, 10 seconds passenger vehicles, two wheelers and uh commercial segments as OEMs ramped up output to meet domestic and export demand. 9:21 9 minutes, 21 seconds Higher festive demand, rural uh market recovery and improved uh 9:28 9 minutes, 28 seconds supply chain conditions supported manufacturing activity across most vehicles categories. Production momentum 9:36 9 minutes, 36 seconds was further bolstered by policy tailwinds including GST rationalization uh festive uh season and new model launches. 9:46 9 minutes, 46 seconds The pro this uh productive phase highlighted the sector's resilience and manufacturing competitiveness through the third quarter. 9:56 9 minutes, 56 seconds After a subdued start, the passenger vehicle market recovered sharply to m finish 20212 10:03 10 minutes, 3 seconds on a strong note. This turnaround was driven by supportive government policies including GST rationalization, the tax 10:11 10 minutes, 11 seconds relief uh which subsequently improved uh consumer sentiment and uh uh showroom traffic. Uh SUVs spearheaded this 10:20 10 minutes, 20 seconds recovery with demand spurred by attractive discounts and seasonal buying ahead of anticipated price hikes. 10:28 10 minutes, 28 seconds The heavy commercial vehicle production uh recorded steady growth uh driven by robust infrastructure demand, strong 10:35 10 minutes, 35 seconds freight movement and continued momentum from GST 2.0, festive demand, the government fleet orders and ongoing road 10:44 10 minutes, 44 seconds construction and mining activity. The bus segment showed notable traction driven by school intercity institutional 10:52 10 minutes, 52 seconds transport orders alongside steady fleet additions by state and private operators. The outlook remains strong. 10:59 10 minutes, 59 seconds The demand expected to be further bolstered by ongoing government capex and fleet replacement cycles. 11:08 11 minutes, 8 seconds The LCV production remained robust, fueled by GST rationalization and a visible revival in demand. Following 11:16 11 minutes, 16 seconds GST2 2.0, the fleet continues to benefit significantly from growth of e-commerce 11:23 11 minutes, 23 seconds which drives high demand for last mile delivery and uh urban logistics. This positive momentum was sustained through 11:32 11 minutes, 32 seconds the uh end of the year reflected in uh rising fleet utilization and increased short hall uh flight activity. The 11:41 11 minutes, 41 seconds three-wheeler segment saw a sharp production increase driven by strong demand for both urban mobility and last 11:48 11 minutes, 48 seconds mile delivery cargo delivery during the festive season. Supported by favorable government policies, OEMs ramped up 11:56 11 minutes, 56 seconds production to meet this demand, allowing the segment to maintain healthy momentum through the end of the period. Tractor 12:03 12 minutes, 3 seconds production showed strong momentum uh supported by healthy rabbi uh sewing activity and carryover liquidity from a 12:12 12 minutes, 12 seconds robust karif harvest which uh improved farmer confidence and cash flows. 12:19 12 minutes, 19 seconds Improved water availability and healthy reservoir levels further aided demand. 12:24 12 minutes, 24 seconds Supportive government measures including lower GST on tractors and state level subsidies enhanced affordability while 12:32 12 minutes, 32 seconds uh rising mechanization and steady non-aggricultural demand from construction and hage provided 12:39 12 minutes, 39 seconds additional support with positive rural sentiment. The tractor market remains well positioned to sustain its growth. 12:48 12 minutes, 48 seconds The two-heer production was moderate in October as OEM adjusted output following earlier inventory buildup. Production 12:56 12 minutes, 56 seconds picked up in November and December as manufacturer ramped up output to meet festive and pre-wedding wedding season 13:03 13 minutes, 3 seconds demand, a recovery that was supported by favorable GST reductions. Next slide, please. 13:11 13 minutes, 11 seconds Looking ahead to fiscal year 2026, we anticipate a period of steady and robust growth for Indian automotive industry. 13:21 13 minutes, 21 seconds The outlook is very positive as we expect three of the core segments, the passenger cars, tractors and two 13:29 13 minutes, 29 seconds wheelers to achieve all-time high production levels. This growth is broad-based underpinning underpinned by strong economic fundamentals and 13:38 13 minutes, 38 seconds supportive policies. In uh passenger vehicles, we expect strong uh we expect record performance driven by improved 13:46 13 minutes, 46 seconds affordability thanks to easing interest rates and favorable GST reforms uh which will stimulate strong consumer demand. 13:55 13 minutes, 55 seconds The commercial vehicle segment is poised for healthy growth uh fueled by sustained infrastructure spending and 14:02 14 minutes, 2 seconds continued expansion of e-commerce logistics. We expect LCV sub segment to be a standout performer achieving its all-time high uh levels. 14:14 14 minutes, 14 seconds The trucked business is also projected to hit a record supported by strong rural sentiment, GST norms and ongoing 14:22 14 minutes, 22 seconds state subsidies. And finally, the two wheel segment is set to scale a new peak. This will be driven by powerful 14:29 14 minutes, 29 seconds combination of improving rural sentiment, rising disposable incomes, improved affordability and recent GST 14:37 14 minutes, 37 seconds cuts and tax rebates for individuals earning up to 12 lakhs uh boosting consumer confidence. 14:45 14 minutes, 45 seconds Next slide please. 14:47 14 minutes, 47 seconds Now I'm going to go through the sector wise sales performance. 14:52 14 minutes, 52 seconds Quarteron quarter the mobility business has shown 18.5% uh in October December 2025 as compared 15:00 15 minutes to October December 2024 driven mainly from the power solutions business which grew by 19.5% mainly on account of 15:09 15 minutes, 9 seconds growth in passenger cars and offhighway segments. The mobility aftermarket recorded a growth of 5.3% mainly on 15:18 15 minutes, 18 seconds account of GST reforms. strong uh growth in OE segment and growth across uh key product groups of diesel wipers and 15:26 15 minutes, 26 seconds braking systems. The two-heer business grew by 58.3% mainly on account of higher sale of exhaust gas sensors due 15:35 15 minutes, 35 seconds to ramp up for OBD2 norms uh implementation from 1st April 2025. The 15:42 15 minutes, 42 seconds consumer goods business declined marginally by 3.1%. 15:49 15 minutes, 49 seconds The mobility business uh has grown by 14.9% in April December 2025 as compared 15:57 15 minutes, 57 seconds to April December 24 driven mainly from uh the power solutions business which grew by 14.1% mainly on account of 16:06 16 minutes, 6 seconds growth in commercial vehicles and off highway segments. The mobility aftermarket business grew 4.8% 8% mainly 16:13 16 minutes, 13 seconds on account of sustained momentum across key product categories including diesel wipers, braking systems and filters. Uh 16:22 16 minutes, 22 seconds this overall growth was further reinforced by robust momentum in the OE segment. As already seen in 16:30 16 minutes, 30 seconds quarteronquarter growth, the two wheeler business has grown significantly due to the ramp up of exhaust sensors resulting 16:38 16 minutes, 38 seconds from OBD2 norms implementation from April 1st, 2025. The consumer goods uh 16:45 16 minutes, 45 seconds business grew by 2.8%. The growth is attributed to new launches in entry level, midp price point segment, 16:53 16 minutes, 53 seconds measuring tools and outdoor garden uh equipments. Next slide please. 17:01 17 minutes, 1 second Quarteron quarter revenue from operations in October December 25 stood at 48,856 17:10 17 minutes, 10 seconds million INR which grew by 9.4% over October December 2024. Uh the growth was 17:18 17 minutes, 18 seconds driven mainly by higher sales in power solutions and two wheeler power sports uh segments as seen in the previous 17:24 17 minutes, 24 seconds slide. Likewise, uh revenue from uh uh revenue for the period April December 17:31 17 minutes, 31 seconds 2025 grew by 9.8% over April December 24 from 17:38 17 minutes, 38 seconds 1 lakh 31,768 million INR to 1 lakh 44,690 million INR. 17:49 17 minutes, 49 seconds This growth was driven also driven by strong performance in power solutions and two-heer power power sport segments. 17:59 17 minutes, 59 seconds The EITA for uh October December 25 was 6,124 18:06 18 minutes, 6 seconds million INR which grew by 5.1% over the same quarter of the previous year. The improvement in EITR 18:14 18 minutes, 14 seconds margin was primarily driven on account of favorable product mix and optimization of expert expenses. 18:23 18 minutes, 23 seconds The AITA for uh period April December 25 was 18,688 18:29 18 minutes, 29 seconds million INR as compared to 16,628 million INR in April December 2024 18:38 18 minutes, 38 seconds which grew by 12.4%. The increase in EITA is on account of growth in revenue accompanied by favorable product mix. 18:50 18 minutes, 50 seconds The profit after tax for October December 25 grew by 16.1% over the same quarter of previous year. 18:58 18 minutes, 58 seconds October December 2024 had an exceptional item uh which you all know the growth in 19:06 19 minutes, 6 seconds profit after uh growth in uh uh growth in profit after tax uh without this exceptional item in October December quarter comes to 5.3%. 19:18 19 minutes, 18 seconds The profit after tax for 9 months ending December 2025 stood at 22,000 19:25 19 minutes, 25 seconds 17 million INRA which is a growth of 50.8% over the same period of previous year. 19:32 19 minutes, 32 seconds The significant growth in PAT is mainly due to the profit on sale of the video solutions access and 19:41 19 minutes, 41 seconds uh intrusion and communication systems business under the building technology segment. Next slide please. I now walk 19:51 19 minutes, 51 seconds you through key highlights for each of our business divisions this quarter. 19:57 19 minutes, 57 seconds The power solutions division delivered strong growth this quarter on the back of broad-based growth across all 20:04 20 minutes, 4 seconds segments with exceptional performance in tractor and heavy commercial vehicle segments boosted by successful rollout of GST 2.0. 20:14 20 minutes, 14 seconds In a significant achievement that underscores Bosch's leadership in operational excellence, our Bitadi plant 20:21 20 minutes, 21 seconds uh was recently awarded at the prestigious national CI scale awards 2025 for digital excellence and 20:30 20 minutes, 30 seconds innovation in logistics for developing an integrated autonomous digital ecosystem that automates our entire 20:38 20 minutes, 38 seconds logistics value stream setting a new industry benchmark. 20:42 20 minutes, 42 seconds Further at the CI Kaizen Awards 2025, the plant secured the champions trophy and the challenges trophy for developing 20:51 20 minutes, 51 seconds lowcost solutions in productivity by improving overall uh equipment effectiveness uh in 20:59 20 minutes, 59 seconds assembly lines and uh quality improvement improvement by human error prevention uh to reduce internal and external complaints. 21:10 21 minutes, 10 seconds Turning now to our two-heer and powers sports. Our strategy is centered on providing advanced technology that 21:16 21 minutes, 16 seconds empowers our OEMs to enhance end user experience. Our solutions truly shown 21:24 21 minutes, 24 seconds this past year uh playing a key role in the successful launch of new vehicles by 21:31 21 minutes, 31 seconds several well-known two-wheer OEMs. The launch of new TVS Apache RTX 300 powered 21:39 21 minutes, 39 seconds by advanced wash systems marked a significant new chapter for the iconic Apache brand. In addition, we further 21:46 21 minutes, 46 seconds demonstrated our role as a key technology partner with the launch of the Harley X440T 21:53 21 minutes, 53 seconds which deeply integrates poss uh features. These partnerships 22:02 22 minutes, 2 seconds underscore the trust the major global brands place in our technology to deliver performance and safety. Beyond 22:09 22 minutes, 9 seconds these launches, we continue to shape the future of mobility by developing next generation technology. Building on 22:16 22 minutes, 16 seconds successful production uh ramp up of OBD2 requirements, 2025 became a landmark 22:22 22 minutes, 22 seconds year for our mini heated lambda sensors, allowing us to achieve new significant uh sales milestones for the product 22:31 22 minutes, 31 seconds line. True to our by riders for riders philosophy, we showcased our latest 22:38 22 minutes, 38 seconds innovations at the uh EICMA IKA 2025 event in Italy. demonstrating our 22:46 22 minutes, 46 seconds unwavering commitment to creating value for both our partners and the end user. 22:52 22 minutes, 52 seconds The mobility aftermarket uh began with a temporary sales impact from the GST 2.0 22:59 22 minutes, 59 seconds implementation in October but we saw a strong rebound shortly thereafter. Uh this recovery was supported by a 23:07 23 minutes, 7 seconds synchronized upturn in the uh automotive sector which was itself driven by 23:14 23 minutes, 14 seconds festive seasonal demand GST reduction and improved consumer confidence. Uh the primary driver of our performance was 23:22 23 minutes, 22 seconds the original equipment or the OES block which effectively leveraged these favorable market conditions. In addition 23:31 23 minutes, 31 seconds to the strong results in the OE block, we also saw healthy growth across other core product groups. 23:40 23 minutes, 40 seconds Specifically, our diesel systems, wiper systems, and braking systems all contributed positively to the quarter's performance. 23:48 23 minutes, 48 seconds Uh for our power tools division, the last past year was one of navigating a challenging market characterized by 23:56 23 minutes, 56 seconds intense price pressure, particularly from competitors in China. This resulted in moderate growth for the division in 24:03 24 minutes, 3 seconds both our quarterly and year-to-ate results. However, on the product front, our cordless segment continued its 24:12 24 minutes, 12 seconds impressive trajectory, achieving double-digit growth for the fourth successive year. In addition, uh 24:20 24 minutes, 20 seconds successful new product launches were significant contributors to our overall sales performance. Uh this product 24:28 24 minutes, 28 seconds success is amplified by our market expansion efforts. We have significantly broadened our reach expanding our dealer 24:37 24 minutes, 37 seconds network to over 8,800 partners which gives us a footprint of 25,000 retail 24:44 24 minutes, 44 seconds points across more than,600 cities. 24:48 24 minutes, 48 seconds A key part of our market expansion is the standard line, a product range developed for artisans in India, 24:55 24 minutes, 55 seconds offering Bosch quality at an accessible price point. To facilitate this, we have established a new distribution network 25:04 25 minutes, 4 seconds with over 100 distributors. In addition, we successfully launched the hand tools uh hand tools as a new business segment. 25:13 25 minutes, 13 seconds This initiative demonstrates strong market acceptance achieving 100 million INR in revenues within the first year. 25:23 25 minutes, 23 seconds Next slide. Yeah, thank you uh for all your contribution and for listening patiently through the call. We will now 25:30 25 minutes, 30 seconds address your queries. Thank you and open for questions please. 25:34 25 minutes, 34 seconds Thank you sir. We'll now begin in the question and answer session. For the participants who wish to ask a question, please raise your hand. Alternately 25:43 25 minutes, 43 seconds participant can also type in their questions in the chat box directly to me. We'll wait for a moment as the question assembles. 25:52 25 minutes, 52 seconds Yeah, the first question is from Mr. 25:55 25 minutes, 55 seconds Promod. Please unmute and ask your question. 26:00 26 minutes Yeah, thanks for taking my question. So the first question is with regard to the uh capex. uh you alluded saying that 26:08 26 minutes, 8 seconds many of your user segment may hit uh historic high volumes. So in that context uh are you relooking at your 26:17 26 minutes, 17 seconds capacities and also the capex requirement for the uh FI2728. 26:28 26 minutes, 28 seconds Okay. Uh Karin, do you want to take that? 26:32 26 minutes, 32 seconds Yes, it's my pleasure. Uh yes you are you are of course fully right in every cycle or this is an ongoing process in 26:39 26 minutes, 39 seconds our company that we check the forwarding volumes predicted by the customers and by the market we look at our technical 26:47 26 minutes, 47 seconds capabilities and capacities and then we adjust our our investments in accordance. So uh golden rule within 26:55 26 minutes, 55 seconds Bosch um we all the time have some buffer left and as soon as we drive into the buffer we release the next capex for extension. 27:06 27 minutes, 6 seconds So would you call out the numbers uh what it can be next year after or compared to this year? 27:13 27 minutes, 13 seconds Um we are currently uh under uh or in consideration and I we do not want to give a guidance here. No. 27:22 27 minutes, 22 seconds Sure. Thank you. 27:23 27 minutes, 23 seconds Thanks. The second question is with regard to the uh India EU deal. Uh uh wanted to check your thought process in terms of first the imported components. 27:33 27 minutes, 33 seconds Uh because uh in terms of purchase goods there's a large chunk which comes from parent. Uh what is the understanding 27:40 27 minutes, 40 seconds with the clients? Uh usually when duties uh drop in such cases usually it's a pass through to the client. are and 27:48 27 minutes, 48 seconds second uh what are the medium-term opportunities you look at exporting from India to a global markets and what are 27:55 27 minutes, 55 seconds the duties there for such products in the current state yeah perhaps uh the first part of your 28:02 28 minutes, 2 seconds question which is regarding uh imports so we are importing uh mainly uh 28:09 28 minutes, 9 seconds components uh from from the parent and um we are this it's also an ongoing 28:16 28 minutes, 16 seconds process of localization. So this year we have uh or in 25 we have a localized no 28:24 28 minutes, 24 seconds sensor for the component for the common rails. We are going ahead with more localization for the common rail 28:31 28 minutes, 31 seconds products. We will go ahead uh in the perspective uh of also localizer do 28:37 28 minutes, 37 seconds sensor. Um so this is a permanent review whenever 28:44 28 minutes, 44 seconds commercially feasible. we are uh doing the localization. 28:50 28 minutes, 50 seconds Um your second part is in regards of the exports. We have increased already already our exports volume uh for the 28:59 28 minutes, 59 seconds spark plugs in 2025 and we expect uh also further uh good 29:05 29 minutes, 5 seconds development of volumes uh uh in the spark plugs and in um and in um components for the common rail products. 29:17 29 minutes, 17 seconds We also expect uh an increasing export volumes in sensors no sensors and what 29:25 29 minutes, 25 seconds we have relocated in the last let's say one and a half years was uh uh pumps from Japan to India. So we deliver these 29:34 29 minutes, 34 seconds pumps also back to India sorry back to Japan and Korea. 29:40 29 minutes, 40 seconds Yeah. Thanks K. May maybe just to add uh uh we should keep in mind that u uh the 29:47 29 minutes, 47 seconds FDA is just signed and uh we are extremely positive about uh what it is likely to bring in the mid and long term 29:56 29 minutes, 56 seconds for uh India and of course also for uh our operations in India. So there we are very very positive. Um the fine print as 30:06 30 minutes, 6 seconds you know needs to be studied in detail and the impact of uh what happens and how we can benefit from that is 30:13 30 minutes, 13 seconds currently under study and uh we are looking into every aspect of how uh uh we can benefit from this. 30:20 30 minutes, 20 seconds Thanks. Uh but will you call out what is your current import duty rates? 30:33 30 minutes, 33 seconds Do you have the numbers Karin? I think uh we'll have to get back to you on that. Yes, exactly. 30:40 30 minutes, 40 seconds Sure. Thanks and all the best. 30:45 30 minutes, 45 seconds Thanks for Mr. Mayor. You can unmute and ask your question. 30:52 30 minutes, 52 seconds Good afternoon. Uh thank you for taking the questions. I hope I I'm audible clearly. 30:58 30 minutes, 58 seconds Yes, you are. I think uh so actually um over the last couple of quarters now we 31:05 31 minutes, 5 seconds have you know our uh this is a question more on the profitability and margins uh you know uh we have stabilized in the 31:14 31 minutes, 14 seconds region of you know around 13% plus minus uh what I wanted to understand is you know we are having a very strong 31:21 31 minutes, 21 seconds tailwind across our portfolio the CV industry is on an upcycle the tractor is doing phenomenal we have OBD2 on the two 31:29 31 minutes, 29 seconds wheelers the passenger vehicle outlook is strong. Uh despite so much of operating leverage and despite localization 31:37 31 minutes, 37 seconds uh why is it that we are not seeing a movement on the margins uh you know uh 31:45 31 minutes, 45 seconds despite the growth coming uh and the narrative on the localization and other aspects you want to take it? 31:55 31 minutes, 55 seconds So I take I take this question question. 31:57 31 minutes, 57 seconds So if you yeah if you look uh at the overall result uh for the last 3 years 32:05 32 minutes, 5 seconds then of course we had a we had a tailwind with the growth which which helped us but we also did a lot of uh 32:13 32 minutes, 13 seconds cost improvement and localization. So you see the EBIT is uh or uh profit 32:20 32 minutes, 20 seconds after tax is going up. So we are improving also the margins. 32:26 32 minutes, 26 seconds Nevertheless, we also of course have to consider a certain product mix which the 32:32 32 minutes, 32 seconds uh market demands and therefore uh um you you sometimes see a growth but 32:40 32 minutes, 40 seconds please also consider that we have to look at the product mix itself. Uh the second thing is but this was for this 32:48 32 minutes, 48 seconds quarter and was already mentioned that we had uh already again a very strong quarter with a very good uh 105% 32:57 32 minutes, 57 seconds EIT and we also did already the first provision for the uh new labor code. So 33:05 33 minutes, 5 seconds uh therefore uh product mix going forward further localization 33:12 33 minutes, 12 seconds uh um working on the costs or on the structural costs also together with the 33:19 33 minutes, 19 seconds growth uh we see a good uh mark uh margin development. 33:26 33 minutes, 26 seconds Uh so you believe that over the next uh 3 to four years uh we should uh the margins should uh start ticking up or 33:34 33 minutes, 34 seconds should be meaningfully different uh as a directionally then compared to current margins. 33:40 33 minutes, 40 seconds Uh well I would I would not give a guidance for the next three and four years. I only can show you uh what we 33:48 33 minutes, 48 seconds have delivered in the last three years and uh and then you can you can see uh 33:54 33 minutes, 54 seconds in which uh uh cycles of uh of margin improvement we are 34:05 34 minutes, 5 seconds so because uh it was quite uh for last almost eight to nine quarters we look I'm talking of more from an IITA margin I understand you talk about EIT margin 34:13 34 minutes, 13 seconds uh from an uh more or less nothing much difference was coming. I understand two years we are comparing from around you know uh there is a 100 basis point 34:22 34 minutes, 22 seconds movement but given the tailwinds which we have you know the uh I was just thinking that should it shouldn't the operating leverage also now play out uh 34:31 34 minutes, 31 seconds over the last uh 12 over the last three four quarters uh any any any specific product mix you want to call out which 34:38 34 minutes, 38 seconds is lower than our average margins just as a qualitative understanding uh um so that uh you know uh we we are able to track the developments. 34:49 34 minutes, 49 seconds So, so look it is it is the margin is of course if you have if new products are coming in we are usually starting with 34:58 34 minutes, 58 seconds we first bring the finished goods into the market then we start the assembly and testing. Then if this is stabilized 35:05 35 minutes, 5 seconds we start with the localization. That means with every new product coming into India and uh and and and and coming into 35:15 35 minutes, 15 seconds the market we start a new localization round. So therefore, yes, the tractor is 35:22 35 minutes, 22 seconds good, the tractor is stable, but of course we have also the common rail. We have now the new uh uh exhaust gas uh uh 35:31 35 minutes, 31 seconds components and with this we are following the uh localization path also. 35:38 35 minutes, 38 seconds But this is the product mix in the technical cycles which we introduce into the markets. There is no specific 35:46 35 minutes, 46 seconds product. It is more technology is uh is uh developing and we are following the te technology path and we are following 35:55 35 minutes, 55 seconds the uh with the localization and uh with more localization uh of course you have then the improvement in the margins as well. 36:05 36 minutes, 5 seconds Okay. Last question uh from my side is you know from your vantage point and your discussion with the OEMs is there 36:13 36 minutes, 13 seconds any incremental uh discussion and development around uh TM 5 possibility we are in February 26 36:21 36 minutes, 21 seconds so just wanted to have your understanding while there are certain things in the domain public domain and understanding but what is your 36:28 36 minutes, 28 seconds understanding of the implementation how gradual where we are and anything you want to if you can uh give your insights on Yeah, I mean maybe I can uh answer that. 36:40 36 minutes, 40 seconds Uh at least at this point of time there is no visibility uh of a precise date of 36:46 36 minutes, 46 seconds uh teriy flipation. So things uh uh are still quite open as far as uh we know with our discussions with yours. 36:59 36 minutes, 59 seconds Okay. Thank you. Thank you. Thank you mayor. 37:02 37 minutes, 2 seconds Uh thank you mayor. Uh if you can take Sharma you can unmute and ask a question. 37:20 37 minutes, 20 seconds I don't any we'll go to the next caller. 37:23 37 minutes, 23 seconds Mr. Nikil Ra you can unmute and ask your question. Hello. Yeah. Can you hear me now? 37:30 37 minutes, 30 seconds Yeah. Yeah. Yeah. Very good. I just wanted to check up what is the Bosch plan for the EV four-wheeler vehicles in India. 37:41 37 minutes, 41 seconds What sort of the okay per car uh component you are targeting to supply? 37:50 37 minutes, 50 seconds Okay. So um maybe this is a very broad uh question and um this uh uh we need to 37:58 37 minutes, 58 seconds distinguish also from the portfolio of Bosch Limited versus the portfolio of uh 38:05 38 minutes, 5 seconds Bosch group in general. Um of course uh from the Bosch group a lot of components 38:12 38 minutes, 12 seconds go into a car into an electric car as well. So that uh continues from the 38:19 38 minutes, 19 seconds portfolio of Mosh Limited. Um we will uh strongly aim to bring in uh uh Eaxles 38:26 38 minutes, 26 seconds and uh uh that would be the biggest component uh that comes in uh into an electric uh vehicle. So we are in 38:34 38 minutes, 34 seconds advanced discussions with uh several OEMs and um as we go forward in the coming uh quarters we will let you know um the exact nature of these things. 38:48 38 minutes, 48 seconds Which component you say? Exax EXL is by far value-wise it's the largest uh value 38:57 38 minutes, 57 seconds component in which goes into an electric vehicle apart from of course uh batteries and other things which uh the OEMs make themselves. 39:06 39 minutes, 6 seconds So you don't see right now you are not supplying anything any to any OEM right? 39:11 39 minutes, 11 seconds We are supplying um uh uh in India we are not supplying the Axels 39:18 39 minutes, 18 seconds to any OEM uh right now. We will we are in advanced discussions on uh several projects with OEMs and uh we will come 39:26 39 minutes, 26 seconds out uh in the open suit. Uh the u uh other components we are supplying uh are 39:32 39 minutes, 32 seconds uh um u chargers uh u or charge DCDC converters power electronics basically that's going from our electronics unit. 39:45 39 minutes, 45 seconds Thank you. 40:27 40 minutes, 27 seconds My question is over. Um, yeah. So, can I go ahead? 40:36 40 minutes, 36 seconds Yeah, please. 40:38 40 minutes, 38 seconds Yeah. So could you help us understand how demand from the commercial vehicle segment is shaping up for Bosch and roughly how much of your CV offtake is 40:47 40 minutes, 47 seconds currently driven by the replacement demand? 40:54 40 minutes, 54 seconds Yeah. So um as uh I mentioned in my uh 41:00 41 minutes uh initial uh talk um when I explained the slides the commercial vehicle demand 41:07 41 minutes, 7 seconds both for HCV and LCVs has been very robust uh uh in the last quarters and um 41:15 41 minutes, 15 seconds it's connected to uh in my view a good uh 41:23 41 minutes, 23 seconds demand following uh the GST 2.0 uh changes and of course uh increased 41:30 41 minutes, 30 seconds uptake on uh government fleet orders and um outgoing activities around construction and uh mining. 41:38 41 minutes, 38 seconds uh we expect uh and of course the LCV demand has also been uh quite uh robust and this is uh primarily connected to 41:47 41 minutes, 47 seconds last mile delivery urban logistics and um in city transportation and so on or short hall uh delivery activities but uh 41:55 41 minutes, 55 seconds this also remains uh very very robust at this point of time uh based on the 42:01 42 minutes, 1 second trends uh of uh what uh the budget came up with uh right now and uh also our 42:08 42 minutes, 8 seconds talks with uh the HCV and LCV uh manufacturers or OEMs we see that this 42:15 42 minutes, 15 seconds trend is likely to continue and uh we expect uh um strong infrastructure 42:22 42 minutes, 22 seconds activity to continue and um uh further in line with the GDP growth we also 42:28 42 minutes, 28 seconds expect uh HCV and u LCV activity to be strong in the coming quarters. 42:38 42 minutes, 38 seconds Okay. And you're seeing good traction from the replacement uh side as well, right? Yes. Yes. 42:46 42 minutes, 46 seconds Okay. And uh are you also seeing an increase in your content per vehicle contribution or like a more favorable product mix with CVS? 42:55 42 minutes, 55 seconds Yes. So there are um uh of course technology additions happening in the CV world and that's uh quite favorable. 43:03 43 minutes, 3 seconds There are also other talks on uh what we can do which are maybe very preliminary at this point of time in terms of 43:10 43 minutes, 10 seconds technology to be discussed in a forum like this. uh but at some point of time uh uh we will uh update you on uh 43:20 43 minutes, 20 seconds additional technology introductions that are likely to come up in the CV HC world. 43:28 43 minutes, 28 seconds Okay, thank you very much. That's all for me to take the next question. Um Mr. 43:40 43 minutes, 40 seconds Sing, can you please unmute yourself and go ahead? 44:16 44 minutes, 16 seconds Mr. Mo, would you like to go ahead and ask a question? 44:55 44 minutes, 55 seconds Hello. Yeah. Am I audible? Yes, you are. Kosh. 45:01 45 minutes, 1 second Yeah. Uh yeah, I just had a couple of questions. Um uh uh like Bosch has been working on alternate flu technologies. 45:09 45 minutes, 9 seconds So uh just wanted to know that uh what is the progress on that and uh will there be a significant increase in 45:17 45 minutes, 17 seconds content per vehicle compared to ICE vehicles um or uh how is it just wanted to get some clarity on that? 45:29 45 minutes, 29 seconds Yeah. So uh I mean Bosch has uh very wide uh portfolio uh options uh also for 45:37 45 minutes, 37 seconds uh uh fuels, flex fuels and so on. Uh we've been uh uh offering this all over the world and of course we also do that 45:45 45 minutes, 45 seconds uh to our OEMs uh in India. Um the content per vehicle is uh not a major 45:53 45 minutes, 53 seconds change uh in uh my view. You'll have to get the precise numbers but uh it's not a very significant change but the 46:02 46 minutes, 2 seconds development um I mean the support to the OEMs is always there in the Indian context. Understood. So thanks for the clarity. 46:11 46 minutes, 11 seconds Uh my followup question would be um like I think we had received some pilot order on hydrogen fuel engine. So what is the 46:19 46 minutes, 19 seconds status on that and is there any future potential for that? 46:24 46 minutes, 24 seconds Uh yeah. So um on the hydrogen u uh u activity, we are working very closely 46:32 46 minutes, 32 seconds with virtually every commercial vehicle uh and bus uh OEM uh in India and um as 46:41 46 minutes, 41 seconds you've probably seen in the press or in media, there's a lot of uh um vehicle testing activity that's currently 46:49 46 minutes, 49 seconds ongoing. All OEMs are uh testing their uh engines, testing the vehicles for uh 46:58 46 minutes, 58 seconds readiness and uh this is the phase it is in. Um there are currently at least no 47:05 47 minutes, 5 seconds known plans of roll out um from any OEMs very specifically. It's most likely also 47:14 47 minutes, 14 seconds connected to how the infrastructure on hydrogen comes up and there uh there are other stakeholders involved other 47:22 47 minutes, 22 seconds players involved and uh we'll have to get more clarity but I think all OEMs are working towards readiness of um 47:30 47 minutes, 30 seconds hydrogen vehicles from their side and we are fully in touch with all of them offering our technology and solutions 47:39 47 minutes, 39 seconds and uh working very closely with the Most of them just to add like if you can clarify like 47:46 47 minutes, 46 seconds by when in India you expect that hydrogen engine will be commercially launched. 47:57 47 minutes, 57 seconds Um see there um it's maybe better to take this question in two parts. Um one 48:04 48 minutes, 4 seconds part is when would vehicles and uh um technology mature uh that's uh the thing 48:12 48 minutes, 12 seconds we can control quite well and there I would say it's going uh well on plan and uh OEMs and us working very closely together towards this. 48:24 48 minutes, 24 seconds The other side of this equation is when would uh infrastructure come up? When would uh we have uh um hydrogen fuel 48:34 48 minutes, 34 seconds stations, filling stations and availability on at least major trunk routes or uh uh right corridors uh be 48:43 48 minutes, 43 seconds available with hydrogen and this seems to be still not very clear at this point 48:50 48 minutes, 50 seconds of time. So um we assume that by uh 2030 definitely there will be uh quite some 48:58 48 minutes, 58 seconds uh hydrogen activity happening and we're working towards that right now. Thank you. 49:11 49 minutes, 11 seconds Thank you very much. 49:13 49 minutes, 13 seconds Yeah. Uh yeah thanks for that clarity. We just have uh one question from uh one participant manu Singh. Uh so uh his 49:22 49 minutes, 22 seconds question is will the new trade deal make the uh will the uh will the new trade deal make 49:29 49 minutes, 29 seconds the material versus import map unfavorable for localization and might see some delays in localization. So if you can address that Karin you want to take that? 49:41 49 minutes, 41 seconds Um yeah yes yes what was the question? Can you repeat please? 49:44 49 minutes, 44 seconds Yeah sure. uh yeah of of localization and if uh there is some 49:52 49 minutes, 52 seconds delay in localization what was the first part what is it 50:03 50 minutes, 3 seconds to to what do you refer to that localization will could come to a delay 50:13 50 minutes, 13 seconds no I assume He he refers it to uh as a consequence of the FDA would uh ah of the FDA. 50:23 50 minutes, 23 seconds Yeah. FDA. Yeah. Yes. Yes. Would there be a delay in localization? 50:27 50 minutes, 27 seconds Uh because there is now an FDA and there is no motivation to do any localization here. 50:35 50 minutes, 35 seconds Uh same I can start and Karen can give you some more specifics. uh the Bosch 50:42 50 minutes, 42 seconds approach with or without FDA has always been to have localized production wherever uh the demand is and um our 50:51 50 minutes, 51 seconds international production network always operates on that theme of uh producing in the region where it's relevant and 50:59 50 minutes, 59 seconds where it's consumed. So that's how we operate around the world and uh this has been the practice with or without uh the 51:07 51 minutes, 7 seconds FDA. So FDA um uh we will have to see what is the actual impact and do we 51:14 51 minutes, 14 seconds really need to recalibrate this approach and do something or uh do we positively benefit from this uh uh approach and 51:22 51 minutes, 22 seconds then enhance uh further localization. In all probability, this will only lead to 51:29 51 minutes, 29 seconds further increased uh localization for us as uh years go by and uh we will continue to uh be on this uh 51:38 51 minutes, 38 seconds localization uh track. Karen, if you have anything specific to add please. 51:45 51 minutes, 45 seconds Yeah, thanks. as you as you mentioned uh the most important thing is or or the philosophy of Bosch is we try to do 51:53 51 minutes, 53 seconds local for local and therefore uh volumes are much more important than an FTA or 51:59 51 minutes, 59 seconds or or import duties what whatsoever and um in addition often localization 52:07 52 minutes, 7 seconds goes along with a strategic approach which we would like to do in a region and therefore yes of course there is uh 52:15 52 minutes, 15 seconds uh could be a positive uh effect. We see we see it positive uh but nevertheless 52:21 52 minutes, 21 seconds our localization road map uh has uh different directions. 52:31 52 minutes, 31 seconds See even if there is an FDA and um there is zero duty on a certain item just the 52:38 52 minutes, 38 seconds logistics may impact the landed cost. Uh so uh there is always uh more sense uh 52:46 52 minutes, 46 seconds when there are good volumes to have it uh fully localized and that's always been our endeavor. 52:57 52 minutes, 57 seconds All right. Uh thanks. Just one follow-up question from the uh same participant. 53:02 53 minutes, 2 seconds Uh on the quarter performance uh we have seen dip in margins for the automotive product segment on sequential basis. Can you give some color on that front? 53:12 53 minutes, 12 seconds Um well if you if you look on the on the on the quarterly basis we have put in uh the provision for the labor code. If I 53:20 53 minutes, 20 seconds cause cor if I correct this uh condition we have again a very strong performance out of operations. 53:33 53 minutes, 33 seconds Sure. Um going forward the next question is from Daran Bandarker from Banyan Tree. Uh Dash, you can unmute and ask. 53:55 53 minutes, 55 seconds Oh. 54:04 54 minutes, 4 seconds Uh no, Dan, you're not audible. 54:15 54 minutes, 15 seconds Okay, Dashan has put it in the chat box. 54:17 54 minutes, 17 seconds Uh his question is why is the auto segment growth so much lower than CV tractor and PV growth rate? 54:37 54 minutes, 37 seconds Hello. Uh, am I audible? 54:45 54 minutes, 45 seconds Yeah. Yeah, you are. Yeah. Yeah. Do you take this? 54:50 54 minutes, 50 seconds No, you can take it, Karen. I don't think uh no it it is with a 54:56 54 minutes, 56 seconds the question is why the uh CV and the um are better in the growth than the than the passenger cars. 55:06 55 minutes, 6 seconds Uh no his question is why is the auto segment growth uh lower than the CV tractor and PV growth? Yeah. 55:13 55 minutes, 13 seconds No do do you mean uh uh our uh uh growth or uh Yes. Yes. 55:22 55 minutes, 22 seconds Okay. 55:24 55 minutes, 24 seconds I think uh our um auto sector growth has uh been uh especially power solutions uh 55:32 55 minutes, 32 seconds and uh after market uh power solutions as a whole. After market has been ahead of uh the sector growth. 55:50 55 minutes, 50 seconds Um okay sure. Uh the next question is uh from Mahwari. Uh you can go you can unmute and ask your question. 56:05 56 minutes, 5 seconds Yeah. Hi. Thank you for the opportunity. 56:07 56 minutes, 7 seconds Uh my question is just relating to the previous question is you supply uh products to various segments of the 56:15 56 minutes, 15 seconds automotive industry whether it's wheeler, passenger cars, tractors and CV. 56:21 56 minutes, 21 seconds Which of the areas are we growing ahead of the underlying industry and where are the uh segments where we are actually 56:30 56 minutes, 30 seconds undergoing uh the industry growth? 56:36 56 minutes, 36 seconds Um broadly I would um say in every u uh one of the auto sector uh uh segments uh 56:46 56 minutes, 46 seconds we have been going above the industry growth rates uh uh for all our products. 56:53 56 minutes, 53 seconds Um the only area uh I would say we have not performed uh maybe so well uh in the 57:00 57 minutes last quarter has been our power tools division which is the non-auto part and uh there we know uh what uh corrective 57:08 57 minutes, 8 seconds steps we need to take and uh we are on it uh right now but uh apart from that u CV two wheeler passenger cars all of 57:17 57 minutes, 17 seconds them uh we are ahead of the uh separate crows uh just on the dividend policy when I 57:24 57 minutes, 24 seconds read that uh there is a change where you have now quantified if I read it correctly anywhere 55 to 80% of stockage 57:34 57 minutes, 34 seconds is this a higher number than the previous policy or it's a lower number okay so uh I think um if you we have 57:43 57 minutes, 43 seconds just brought a lot more clarity into our uh dividend uh policy right now uh if 57:50 57 minutes, 50 seconds you had looked at our previous one um it was an open policy. There were no limits 57:56 57 minutes, 56 seconds or ranges set and it was completely left open and um the board uh discussed this and said it may be better to give it a 58:05 58 minutes, 5 seconds clear uh view and therefore clear guidance on how this is going to work and that's what we've endeavored to do. 58:14 58 minutes, 14 seconds Of course, uh the final dividends u irrespective of this policy can always uh lie with the board and uh they take the final call on how this goes. 58:26 58 minutes, 26 seconds Okay, fair. Um and lastly, could you comment on your export performance for this year? How is the quarter or the 58:35 58 minutes, 35 seconds nine months shaping up? Just a qualitative comment in terms of how do you see the outlook for the Well, we are we 58:45 58 minutes, 45 seconds Yeah. So we are um um in the exports we 58:51 58 minutes, 51 seconds are uh steadily grow uh um of course we are uh 58:59 58 minutes, 59 seconds we are we are looking forward to do more. I I mentioned it already especially in park spark plugs, sensors, 59:08 59 minutes, 8 seconds pumps to Japan and Korea and therefore in the last year stepwise we increased 59:14 59 minutes, 14 seconds our exports but again main focus for us is the Indian market. 59:23 59 minutes, 23 seconds Okay great thank you so much and all the best. Yeah. Uh thanks Goku. Due to lack 59:30 59 minutes, 30 seconds of time that was the last question. Uh on behalf of BNK security we thank all the participants for joining the call and thanks to Bosch management for 59:39 59 minutes, 39 seconds taking time out for the call and giving us the opportunity to host the call. Have a good day. 59:44 59 minutes, 44 seconds Thank you everyone and uh we uh are happy that uh the market momentum has been positive and uh we expect this to 59:53 59 minutes, 53 seconds continue uh in the coming quarter and uh we are looking forward to uh much better uh performance as we go forward. Thank you. 1:00:02 1 hour, 2 seconds Thanks sir. Thank you. Bye-bye. Bye.