Chennai, NFAPost: Bosch on Tuesday posted a consolidated net loss of Rs 120.83 crore for the first quarter ended June 30, 2020. The company had posted net profit of Rs 279.95 crore in the corresponding quarter of the last year.
The company said the Covid-19 pandemic adversely impacted sales in all segments during the first quarter. Its total revenue from operations stood at Rs 992 crore, a decline of 64%. Its loss after tax stood at 12.1% of total revenue from operations.
“The Indian automotive market continues to undergo structural changes. Bosch Limited has continued its investment in restructuring, reskilling, and other transformational projects. An additional provision of Rs 197 crore has been disclosed as an exceptional item for the quarter ended June 30, 2020 for this purpose,” the company said.
“As anticipated, the financial year 2020-21 began on an extremely challenging note. The Indian economy is expected to witness sharp contraction, with GDP projected to be between minus 4% and minus 6% in the current fiscal year. Multiple lockdowns in several states are adversely affecting the supply chain,” Bosch Managing Director Soumitra Bhattacharya said.
“With the ripple effect of this continuing to be felt in the coming years, we now have to do all we can to counter the business situation while exhibiting utmost care for our associates. We will continue our journey of transformation to make Bosch stronger in the future. The focus for the upcoming quarters will remain on the agriculture sector, particularly on tractor demand. However, the auto sector as a whole will take four to five years to return to the levels of 2018-19,” he added.
The combination of the slowdown in the automotive industry and Covid-19 is affecting Bosch Limited’s sales. Sales decreased 68.2% in first quarter of FY2020–21, with the Powertrain Solutions division registering a decline of 78.3%. However, the Two-Wheeler and Powersports product unit witnessed good double-digit growth during the quarter. Outside the Mobility Solutions business sector, business recorded a decline of 59.9%. In June 2020, the company witnessed a recovery in sales volumes after the easing of nationwide lockdown restrictions.
Making the company “fit for the future” with a 3R approach
In response to the anticipated burdens as a result of the challenging situation, Bosch is taking measures to manage resources and costs. Agility and operational efficiencies will help optimize its core business with. To secure liquidity, extensive programs to adjust manufacturing capacity and cost structures are in place.
At the same time, the company is preparing for a potential switch to electrified vehicles, which will lead to a significantly reduced demand for direct manpower as compared to 2018-19. Right-sizing the organisation is therefore an urgent need. Here, the company is following a 3R approach (restructure, reskill, redeploy), in which it has invested Rs 800 crore.
Committed to carbon neutrality, even in tough business situation
Bosch Limited has decided to buy solar power from AMP Solar Technology Private Limited and Hinduja Renewables Energy Private Limited for use in its facilities in Karnataka and Maharashtra, respectively. In line with the captive power generation rules of the respective states, Bosch is taking a minority stake in these power projects. This acquisition will mean a substantial increase in the green energy procured by Bosch India, thus further supporting Bosch’s move toward carbon neutrality, the company said.
The company’s shares closed at Rs 13,260.95, down 2.43% on Tuesday.