Bosch Limited Q3 FY25 Earnings Call Summary

Summary

Bosch Limited - Q3 FY 2025-26 Earnings Call Summary Monday, February 09, 2026, 4:00 PM IST

Event Participants

Executives 2 Guruprasad Mudlapur (MD & CTO), Karin Gilges (CFO)

Analysts 6 Annamalai Jayaraj (B&K Securities), Darshan Bhandarkar (Banyan Tree), Gokul Maheshwari, Mohit Jain, Mayur, Pramod Amthe

Financials & KPIs

Geographic & Segment Commentary

• Power Solutions: Exceptional performance in Tractor and Heavy Commercial Vehicle segments, bolstered by GST 2.0 implementation. Management reported a successful digital logistics ecosystem rollout at the Bidadi plant, improving equipment effectiveness and reducing internal complaints.

• Mobility Aftermarket: Witnessed a strong rebound after a brief October lull caused by GST transitions. Growth was led by the OE/OES block, specifically in diesel systems, wiper systems, and braking systems as consumer confidence improved.

• 2-Wheeler & Powersports: Strategy focused on high-value safety and powertrain systems, exemplified by integration into the TVS Apache RTX 300 and Harley X440T. Segment benefited from the regulatory transition to OBD-II norms starting April 2025.

• Consumer Goods (Power Tools): Navigated a challenging market with intense pricing pressure; however, the Cordless segment achieved double-digit growth for the fourth consecutive year. Distribution expanded to 1,600 cities with a new “standard line” targeting Indian artisans at lower price points.

Company-Specific & Strategic Commentary

• Localization Strategy: Localized NOx sensor components and common rail products in 2025 to mitigate import reliance; management stated that Bosch follows a “local for local” philosophy where volume justifies production.
• Electric Vehicle Entry: Management confirmed advanced discussions with multiple OEMs for the supply of E-axles, the company’s highest value-add component for 4-wheeler EVs.
• Alternate Fuel Readiness: Active testing of hydrogen fuel engines with major CV and bus OEMs; commercial rollout remains dependent on nationwide hydrogen fueling infrastructure (expected by 2030).
• Capital Allocation: Clarified a structured dividend policy of 55% to 80% of profits, moving away from the previous open-ended policy to provide investor clarity.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Margin Trajectory

• Question: Why hasn’t operating leverage improved margins despite strong sector tailwinds? (Mayur)
• Answer: Margins are currently impacted by the lifecycle of new products (starting with imported finished goods before moving to local assembly and full localization) and the initial provision for the New Labour Code (Karin Gilges).

EV Strategy

• Question: What are the plans for the 4-wheeler EV segment in India? (Nikhil Rao)
• Answer: Bosch is targeting E-axles as the primary high-value component. While not yet supplying e-axles in India, discussions are in advanced stages; currently supplying power electronics like DC/DC converters (Guruprasad Mudlapur).

Trade Impacts (FTA)

• Question: Will the India-EU FTA discourage localization due to lower import duties? (Pramod Amthe / Himanshu Singh)
• Answer: No. Logistics costs and the “local for local” strategy ensure that high-volume products will always be localized. Bosch is currently studying the fine print to identify export benefits for spark plugs and sensors to Europe (Guruprasad Mudlapur / Karin Gilges).

Segment Concentration

• Question: Which segments are outperforming the industry? (Gokul Maheshwari)
• Answer: Power Solutions and 2-Wheelers are growing ahead of industry averages. The only laggard is Power Tools due to external competitive pressures (Guruprasad Mudlapur).

Key Takeaway

Bosch Limited delivered a robust 9.4% YoY revenue growth in Q3 FY26, driven by a 58% surge in the 2-wheeler segment and strong demand in Heavy Commercial Vehicles following GST reforms. While EBITDA margins faced slight pressure at 12.5% due to product mix cycles and new labor law provisions, the company’s strategic pivot toward high-value localized components like NOx sensors and upcoming E-axles for the EV market remains on track. Management expressed high confidence in FY26, predicting record production volumes across Passenger Vehicles and Tractors. With a newly formalized dividend policy of 55-80% payout and a clear roadmap for hydrogen and electric powertrains, Bosch is positioning itself to capture the next leg of India’s manufacturing-led growth. The primary watch point remains the stabilization of margins as localized production for newer BS-VI and OBD-II technologies reaches scale.