Bosch — Q1 FY26 earnings call

Call held 5 Aug 2025

Management summary

Bosch Limited reported strong year-on-year growth in revenue and EBITDA for Q1 FY26, with a significant boost to PAT margin from a strategic divestment. The mobility business, especially two-wheelers and power solutions, showed robust sequential growth. However, overall revenue saw a sequential decline, and the company navigates global economic uncertainties and specific headwinds in certain domestic automotive segments.

Highlights

  • Revenue from operations stood at ₹4,788.6 crores (47,886 million INR), growing by 10.9% over April-June 2024.

  • EBITDA was ₹639.3 crores (6,393 million INR), marking a 23% growth over the same quarter of the previous year.

  • Profit after tax stood at 23.3% of revenue from operations, a significant increase from 10.8% in the prior year, partly due to a gain on divestment.

  • The mobility business grew by 14.3% quarter-on-quarter, with power solutions growing by 13.7% and two-wheeler business by 39.2% sequentially.

  • The consumer goods business grew by 9.3% year-on-year, driven by higher demand for tools and accessories.

Concerns

  • Overall revenue declined by 2.5% quarter-on-quarter compared to Jan-March 2025.

  • EBITDA marginally declined by 1.2% quarter-on-quarter.

  • The building technologies business declined significantly by 65.3% YoY and 64.7% QoQ due to the sale of Video Solutions, Access and Intrusion and Communication systems business.

  • Passenger vehicle growth is expected to remain moderate in FY26 due to high inventory levels and potential EV component shortages from Chinese export restrictions.

  • Global auto markets, particularly in Europe, are experiencing muted growth, with management stating the 'worst is not over'.

Key financials

  1. Revenue ₹4,788.6 Cr +10.9%YoY
  2. EBITDA ₹639.3 Cr +23%YoY
  3. EBITDA Margin 13.3%
  4. PAT Margin 23.3%
  5. PAT ₹1,115.996 Cr

What they filed

Q1 FY27: revenue up 22.0%, net profit down 37.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue4,394 4,466 4,911 4,789 4,795 +9%4,886 +9%5,566 +13%5,842 +22%
EBITDA560 583 647 639 617 +10%612 +5%782 +21%818 +28%
Net profit536 458 554 1,115 554 +3%532 +16%568 +3%702 −37%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Mobility Business
    14.3% Growth
  • Power Solutions
    13.7% Growth
  • Mobility Aftermarket
    5.2% Growth
  • Two-wheeler business
    39.2% Growth
  • Consumer Goods
    9.3% Growth-20.3% Growth
  • Building Technologies
    -65.3% Growth-64.7% Growth

Capital allocation

high confidence
  • M&A Video Solutions, Access and Intrusion and Communication systems business Divestment · Closed

    Realized significant additional investment, IP, and change dynamics were required to make this into a top performer, which was not in the company's focus.

    Profit on sale was recognized during the quarter, contributing to the increase in profit after tax.

    The increase is on account of improved EBITDA margins and on account of profit on sale of Video Solutions, Access and Intrusions and Communication systems business which was recognized during the quarter.

What to watch in Q2 FY26

Resolution/Impact of Rare Earth Magnet Issue

Next quarter
Current Inventory coverage until end of August; task forces working on several options.
Target Stable supply chain, no material impact on production/sales.

Why it matters

The rare earth magnet issue directly impacts production and supply chain stability for key components, making its resolution critical for operational continuity.

We see inventory coverage until end of August. We are working on several options.

Risks & concerns

  • Global geopolitical and economic uncertainties

    medium

    Global landscapes are being redefined by BANI (Brittle, Anxious, Non-linear, Incomprehensible) due to wars, US tariff discussions, growth disparity, and persistent supply chain challenges.

    Management acknowledged

  • Potential component shortages for EV due to Chinese export restrictions

    medium

    Passenger vehicle growth in FY26 could be impacted by potential component shortages for EVs due to Chinese export restrictions, identified as a 'key watch out'.

    Management acknowledged

  • Rare earth magnet supply chain disruption

    medium

    The rare earth magnet issue is impacting the company, with inventory coverage until end of August and multiple options being explored by task forces in India and globally.

    Management acknowledged

  • Headwinds from evolving comfort norms for commercial vehicles

    low

    The overall commercial vehicle segment is projected to grow at a moderate single digit due to headwinds from evolving comfort norms.

    Management acknowledged

  • Headwinds for two-wheelers from new OBD 2 Phase-B emission norms, stricter safety norms, and high base effect

    low

    Despite an optimistic outlook, the two-wheeler segment faces challenges from new OBD 2 Phase-B emission norms, stricter safety norms, and a high base effect.

    Management acknowledged

  • TRAM 5 emission norms for tractors are on hold

    low

    Tractor emission norms (TRAM 5) are currently on hold, and the company is monitoring for changes, impacting the tractor segment.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
Two-wheeler business localization and contribution to revenue Partial
Regarding localization, we were expecting because a lot of the content is coming out of the OBD 2 and therefore, we were prepared for this and this is localized and delivered from our Bidadi plant. And so we are happy to have the localization on board and we are more than happy to see now the ramp up in the two-wheeler business. ... nevertheless, we do not give segmental numbers.

Clarifies successful localization of two-wheeler components post OBD2 norms but management avoids disclosing segment-specific revenue contribution.

Asked by Pramod Amte

MoU between Bosch Germany and Tata Electronics Direct
See, the MoU is between Bosch Germany and Tata Electronics and the MoU period is for a year to explore potential cooperation opportunities in semiconductors and OSAT topics. ... Right now, there is no direct benefit out of this MoU. It is a very early stage exploration with Tata Electronics and the connection could be that once we are making progress and we are able to see some localization possibilities with semiconductors, we could see some benefits going forward.

Explains the global nature of the MoU and its current lack of direct benefit to Bosch Limited, while hinting at potential future localization advantages.

Asked by Sriram

Restructuring of mobility business and potential merger of sister entities with Bosch India Evasive
We have already made a statement on this towards SEBI. See, the thing is we continuously look at opportunities on what can be enhanced, what can be divested, what can be changed in our product portfolio and this is always an ongoing ordinary course of business for us. At this point of time, I would say there is nothing concrete in any form which is worth reporting even to the regulator or disclosing it beyond that.

Management avoids confirming or denying any specific merger plans, stating it's an ongoing evaluation process without concrete details to report, indicating no immediate structural changes.

Asked by Sriram

Electronification (electronics manufacturing) in the listed entity Direct
So all I can say is there was a very good reason why it was set up like this and the unit is more or less a contract manufacturer to us and supplies all electronics through the listed entity. And at this point of time, I do not want to speculate any further changes and that is how it is.

Confirms that electronics manufacturing for mobility is handled by a privately held sister entity as a contract manufacturer, with no immediate plans for integration into the listed entity.

Asked by Chandrakant

Impact of rare earth magnet issue on Bosch and OEMs Direct
Therefore, of course, fastly after we got the information that this is happening, we have implemented a task force here in India and also implemented a task force for Bosch Global where we from India are part of. So therefore, we have screened all our material numbers, we have set the applications... we see an impact. We see inventory coverage until end of August. We are working on several options.

Acknowledges the impact of the rare earth magnet issue, outlines mitigation efforts with task forces, and provides a timeline for current inventory coverage.

Asked by Annamalai Jayaraj

Bosch's strategy to capitalize on EV trends in India Direct
we are a dominant technology supplier in the EV space worldwide. And even in a very highly competitive market like China, Bosch is an extremely strong supplier of EV technologies to several OEMs in China and we are quite dominant there. We have a portfolio which ranges from two-wheeler electrification all the way up to heavy commercial vehicle electrification and we offer that to all OEMs globally. It is also the same endeavor for us in India to remain a dominant player and offer these technology solutions to all our OEMs locally and this is what we are doing. We hope to have some, we are in good discussions with several OEMs on electrification projects right now and we hope to have some good news in the coming months.

Highlights Bosch's global EV expertise and ongoing discussions with Indian OEMs for electrification projects, signaling future growth potential in the evolving sector.

Asked by Annamalai Jayaraj

Export lines of business where Bosch India is competitive Direct
I can give you some very good examples where we export, this is the NOx sensor, this is a spark plug, this is the certain injectors where we deliver volumes to Europe. ... another very good example where we took over for the so-called Zexel Pumps, all volumes and all the whole portfolio from Japan, we are producing it in our plant in Jaipur, and we are exporting this now to Japan.

Provides specific examples of products (NOx sensors, spark plugs, injectors, Zexel Pumps) and markets (Europe, Japan) where Bosch India has established export competitiveness, indicating diversification.

Asked by Laxminarayan

Status of TRAM 5 emission norms for tractors and localization efforts Direct
Tractor emission norms, as you know, TRAM 5 is sort of on hold right now, and we will see as and when that changes, we will update you. ... the intent is to continuously increase our localization content, we are very much on track with that. ... we are on plan and we will continuously increase localization.

Informs about the current hold on TRAM 5 norms, which impacts the tractor segment, and reiterates the company's commitment to continuous localization efforts.

Asked by Laxminarayan

2 min read 6 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Bosch Limited reported a revenue from operations of ₹4,788.6 crores (47,886 million INR) in April-June 2025, marking a 10.9% year-on-year growth. EBITDA for the quarter stood at ₹639.3 crores (6,393 million INR), a 23% increase year-on-year. The profit after tax margin significantly expanded to 23.3% of revenue, up from 10.8% in the prior year, partly boosted by a gain from the divestment of the Building Technologies business. However, on a sequential basis, revenue declined by 2.5% and EBITDA marginally decreased by 1.2%.

Mobility Business and Segmental Growth

The mobility business demonstrated robust quarter-on-quarter growth of 14.3% in April-June 2025, primarily fueled by a 13.7% increase in the power solutions business due to higher demand for diesel components in off-highway and passenger car segments. The two-wheeler business saw significant growth of 39.2% QoQ, driven by the ramp-up in sales of exhaust gas sensors following the implementation of OBD 2 norms. The mobility aftermarket business also grew by 5.2% QoQ, while the consumer goods business grew by 9.3% YoY.

Building Technologies Divestment and Portfolio Strategy

The Building Technologies business experienced a substantial decline of 65.3% year-on-year and 64.7% quarter-on-quarter, primarily due to the sale of the Video Solutions, Access and Intrusion and Communication systems business. Management clarified this divestment was a strategic decision based on commercial prudence, as the segment required significant additional investment that was not aligned with the company's focus to be a top-three player in its core segments. The profit from this sale contributed to the improved PAT margin this quarter.

EV Strategy and ADAS Development

Bosch Limited is actively engaging with Indian OEMs on electrification projects, leveraging its global expertise as a dominant EV technology supplier. The company is in discussions with several OEMs for new electrification projects, anticipating positive developments in the coming months. While ADAS solutions are currently supplied globally by a sister company, management sees significant opportunities for ADAS in India going forward, despite the portfolio not belonging under Bosch Limited currently.

Localization and Export Focus

The company is committed to continuously increasing its localization content, particularly for two-wheeler components post OBD 2 norms, with production from its Bidadi plant. Bosch India also aims to continuously increase its exports, with specific examples including NOx sensors, spark plugs, and injectors delivered to Europe, and Zexel Pumps produced in Jaipur and exported to Japan. This strategy aims to enhance cost competitiveness and diversify revenue streams.

Global and Domestic Economic Headwinds

Management acknowledged a challenging global landscape marked by geopolitical tensions, US tariff discussions, and persistent supply chain issues, describing it as 'Brittle, Anxious, Non-linear and Incomprehensible (BANI)'. Domestically, while India shows resilience, passenger vehicle growth is expected to be moderate due to high inventory levels and potential EV component shortages from Chinese export restrictions. The tractor segment faces uncertainty with TRAM 5 emission norms currently on hold, and the auto market in Europe continues to experience muted growth.

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