Bosch — Q2 FY26 earnings call

Call held 11 Nov 2025

Management summary

Bosch Limited delivered strong financial results for Q2 and H1 FY26, with significant revenue and profit growth driven by robust performance in mobility, especially two-wheelers and power solutions. While the consumer goods segment faced margin pressure and the aftermarket saw temporary headwinds from GST reforms, the company is actively pursuing strategic initiatives in EV, hydrogen ICE, and product localization, navigating global and domestic macroeconomic challenges with optimism for future growth.

Highlights

  • Revenue for April-September 2025 reached 95,834 million INR, marking a 10% YoY growth.

  • EBITDA for April-September 2025 was 12,564 million INR, growing 16.3% YoY, driven by favorable product mix and expense optimization.

  • PAT for April-September 2025 stood at 16,696 million INR, a significant 66.7% YoY growth, partly due to divestments.

  • The two-wheeler business demonstrated robust growth of 81.8% QoQ, primarily due to the implementation of OBD-2 norms and high sales of exhaust gas sensors.

  • The power solutions business showed strong performance, growing 9.5% QoQ and 11.5% YoY, driven by higher demand for diesel components.

Concerns

  • The consumer goods business grew marginally by 1.8% QoQ, with profit declining from Rs. 40 crores to Rs. 12 crores due to adverse exchange rates and higher material costs.

  • Mobility aftermarket turnover was impacted in Q2 FY26 by GST 2.0 rate cuts, leading to liquidation of existing stocks by dealers.

  • The EV business is characterized as a 'tough entry business' with inherent margin pressure.

  • Resolution of Xperia supply issues remains 'tentative' and 'touch and go', requiring cautious management.

Key financials

3 periods

Q2 FY26

  • Revenue
    47,948 Mn
    QoQ +9.1%
  • EBITDA
    6,171 Mn
    QoQ +10.1%
  • PAT Growth
    3.4%

Q2 FY26 ex-exceptional

  • PAT Growth
    11.2%

H1 FY26

  • Revenue
    95,834 Mn
    YoY +10%
  • EBITDA
    12,564 Mn
    YoY +16.3%
  • PAT
    16,696 Mn
    YoY +66.7%

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 (Q2 FY26)
    11.9% Growth
  • Power Solutions (Q2 FY26)
    9.5% Growth
  • Mobility Aftermarket (Q2 FY26)
    3.7% Growth
  • Two-wheeler Business (Q2 FY26)
    81.8% Growth
  • Consumer Goods Business (Q2 FY26)
    1.8% Growth₹12 Cr Profit₹40 Cr Previous Profit
  • Mobility Business (H1 FY26)
    13.1% Growth
  • Power Solutions (H1 FY26)
    11.5% Growth
  • Mobility Aftermarket (H1 FY26)
    4.5% Growth
  • Consumer Goods Business (H1 FY26)
    5.4% Growth

Capital allocation

medium confidence
  • M&A OE Diagnostics business Divestment · Closed · Consideration ₹[object Object] (undisclosed)

    Generated a profit on sale, contributing to PAT.

    Profit of 485 million INR contributed to July-September 2024 PAT.

    July-September 2024 had an exceptional item through the profit on sale of OE Diagnostics business of 485 million INR.
  • M&A Video solutions, access and intrusion, communication systems business and building technology segment Divestment · Closed

    Contributed significantly to the growth in profit after tax for H1 FY26.

    Significant growth impact on H1 FY26 PAT (66.7% YoY) mainly due to profit on sale of this segment.

    The significant growth impact is mainly due to the profit on sale of the video solutions, access and intrusion and communication systems business and building technology segment.

Guidance & targets

Volume

  • Passenger car growth Volume · FY26 · High confidence all-time high
    The passenger car's growth is projected to reach an all-time high in FY'26.

    — Guruprasad Mudlapur

  • Commercial vehicle segment growth Volume · FY26 · High confidence gradual growth
    The commercial vehicle segment anticipates gradual growth in FY'26.

    — Guruprasad Mudlapur

  • Tractor market growth Volume · FY26 · High confidence all-time high
    The tractor market is projected to reach an all-time high, fuelled by strong rural sentiment, favorable monsoon forecasts, GST norms, and rising minimum support prices for key crops.

    — Guruprasad Mudlapur

  • Two-wheeler segment growth Volume · FY26 · High confidence all-time high
    The two-wheeler segment is projected to reach an all-time high, driven by steady replacement demand and a robust urban consumption revival.

    — Guruprasad Mudlapur

  • Three-wheeler segment growth Volume · FY26 · High confidence steady growth
    The three-wheeler segment in India is poised for steady growth in FY26, supported by goods transport and passenger services.

    — Guruprasad Mudlapur

Market Share

  • Hydrogen ICE market penetration Market Share · by 2030 · High confidence 8-15%
    And we expect between 8% to 15% market penetration by around 2030. So that's the sort of expectation we have on hydrogen in heavy commercial vehicle segments.

    — Guruprasad Mudlapur

What to watch in Q3 FY26

Consumer Goods Business Recovery

Next quarter
Current 1.8% QoQ growth, profit declined from Rs. 40 crores to Rs. 12 crores
Target Improved growth and profit recovery

Why it matters

This segment experienced a significant profit decline, and management expects it to pick up, indicating potential for margin improvement.

So, I think there has been a slightly lower than expected growth in our consumer goods business... we do not see this as anything structural internally... we should see this picking up again moving forward.

Risks & concerns

  • Global Macroeconomic Challenges

    medium

    Tariff pressures and geopolitical unrest are influencing market sentiments worldwide.

    Management acknowledged

  • Consumer Goods Profitability

    medium

    Adverse exchange rate movements and higher material costs impacted margins, leading to a profit decline from Rs. 40 crores to Rs. 12 crores.

    Management acknowledged

  • EV Business Margin Pressure

    medium

    The EV segment is a 'tough entry business' with inherent margin pressure.

    Management acknowledged

  • Xperia Supply Uncertainty

    medium

    Resolution of Xperia supply issues is 'still tentative' and 'touch and go', requiring cautious management.

    Management acknowledged

  • Export Geopolitical Risks

    medium

    Geopolitical space, tariffs, and landed costs create caution for export growth, despite long-term commitment.

    Management acknowledged

  • Indian Fiscal Slippages

    low

    Weaker tax inflows and elevated CAPEX spending are keeping fiscal discipline in focus.

    Management acknowledged

Q&A highlights

6 direct
Consumer Goods Business Performance and Profit Decline Partial
I think there has been a slightly lower than expected growth in our consumer goods business. We do not see this as anything structural internally. We have an extremely good product mix and a product range. We see a reduction mainly on account of adverse exchange rate moments resulting in slightly higher material cost.

Highlights a specific underperforming segment with a significant profit decline (from Rs. 40 crores to Rs. 12 crores) and management's explanation, indicating it's not a structural issue.

Asked by Pramod Amte

EV Penetration and Margin Pressure Direct
On the EV, yes, I think we made steady progress and we will soon update you on some of the bigger updates that we have in terms of business opportunities. But at this point of time, I can assure you that the progress has been steady and we are moving towards a better business in the EV side. The margin pressure will remain. It is a tough entry business right now.

Provides insight into Bosch's EV strategy, confirming steady progress but acknowledging the inherent margin pressure and competitive challenges in this new segment.

Asked by Pramod Amte

ABS for Two-Wheelers Mandate and Bosch's Readiness Direct
So as you're probably aware, our sister company is one of the market leaders in ABS for two-wheelers and we do quite a lot. We are not, I mean, the two-wheeler division sells it for us. In terms of capacities, we are very well prepared to handle the increased demand that's likely to come out of changes in legislation.

Addresses a key regulatory development in the two-wheeler segment and confirms Bosch's preparedness to meet potential increased demand from legislative changes.

Asked by Pramod Kumar

Non-Ferrous Motors and Hybrid Systems Strategy Direct
So on non-ferrite motors or motors without air magnets, there are multiple options here. We are currently exploring all options... On hybrids, our position is quite clear. We have a lot of technology for the hybrid segment. We offer this to several OEMS globally. And we are very open to doing that in the Indian market as well.

Demonstrates Bosch's engagement with evolving powertrain technologies, including non-ferrite motors and hybrid systems, and their readiness to offer these solutions to OEMs.

Asked by Pramod Kumar

Xperia Supply Resolution Update Partial
Yes, I mean, it's still a little tentative. But at this point of time... the issue is resolving well. And we hope to have a good resolution on this. But at this point of time, we would like to play it very cautiously because it's still touch and go in terms of supplies.

Highlights an ongoing supply chain risk (Xperia) that, while resolving, still requires cautious monitoring due to its tentative nature and potential impact on supplies.

Asked by Pramod Kumar

Export Traction and Geopolitical Risks Direct
At this point of time, I would again be a bit cautious on exports. There is a lot happening in the geopolitical space, also connected to tariffs, landed costs and so on. So we are assessing the situation. Our commitment to increase exports in the long run still is very much valid.

Reveals a cautious stance on export growth due to macro-geopolitical factors, tariffs, and landed costs, indicating potential headwinds for international revenue diversification.

Asked by Annamalai Jayaraj

Hydrogen ICE Engine Timeline and Progress Direct
So see this, I think we've said this in the past as well. This is currently a sort of a technology maturity phase. The pilot vehicles with our technology are built and OEMs are testing the vehicles... And we expect between 8% to 15% market penetration by around 2030.

Provides a long-term outlook and specific market penetration target for hydrogen ICE engines, a key future technology, primarily for heavy commercial vehicles.

Asked by Senthil Manikandan

Flux Engines Collaboration with OEMs Direct
Yes, I mean, we work with OEMs on all technology options, including this. So, we certainly are working with OEMs.

Confirms Bosch's active involvement and collaboration with OEMs on emerging technologies like flux engines, indicating a broad approach to future powertrain solutions.

Asked by Annamalai Jayaraj

2 min read 7 chapters

Detailed narrative

Q2 and H1 FY26 Financial Performance Overview

Bosch Limited reported robust financial performance for H1 FY26, with revenue growing 10% YoY to 95,834 million INR and EBITDA increasing 16.3% YoY to 12,564 million INR. PAT for H1 FY26 surged 66.7% YoY to 16,696 million INR, significantly boosted by divestments. For Q2 FY26 (July-September 2025), revenue stood at 47,948 million INR, representing a 9.1% QoQ growth, while EBITDA was 6,171 million INR, growing 10.1% QoQ.

Automotive Segment Growth Drivers

The Indian auto industry experienced steady growth across all segments, with strong demand for passenger vehicles (SUVs and EVs) and two-wheelers. The two-wheeler business recorded an impressive 81.8% QoQ growth, primarily driven by the implementation of OBD-2 norms and high sales of exhaust gas sensors. The power solutions business also contributed significantly, growing 9.5% QoQ and 11.5% YoY, fueled by higher demand for diesel components in passenger car and off-highway segments.

Consumer Goods and Aftermarket Challenges

The consumer goods business showed marginal growth of 1.8% QoQ, but its profit declined significantly from Rs. 40 crores to Rs. 12 crores, attributed to adverse exchange rate movements and higher material costs. The mobility aftermarket segment grew 3.7% QoQ, but its turnover in Q2 FY26 was impacted by GST 2.0 rate cuts, leading to dealer stock liquidation, though management anticipates a recovery in Q3 FY26.

Strategic Focus on Future Mobility Technologies

Bosch is making steady progress in the EV segment, acknowledging it as a 'tough entry business' with initial margin pressures. The company is actively exploring options for non-ferrite motors and offering hybrid system technologies to OEMs globally and locally. Furthermore, Bosch is involved in the development of hydrogen ICE engines, expecting 8-15% market penetration by 2030, primarily in heavy commercial vehicles, with pilot vehicles currently undergoing testing.

Regulatory Landscape and Market Outlook

Management highlighted the positive impact of September GST reforms, which boosted affordability and pre-festive buying, leading to a sharp rebound in passenger vehicle sales. Upcoming regulatory changes like TREM V and CAFÉ norms are expected to drive further growth. GDI technology is already compliant and poised for continued traction, supported by performance, clean emissions, and CAFÉ norms.

Portfolio Optimization and Divestments

The company's H1 FY26 PAT growth of 66.7% was significantly influenced by the profit from the sale of its OE Diagnostics business, which contributed 485 million INR. Additionally, the divestment of its video solutions, access and intrusion, communication systems business, and building technology segment also contributed materially to the strong PAT growth, indicating ongoing efforts to optimize its business portfolio.

Global and Domestic Macroeconomic Environment

While the global stage presents challenges from tariff pressures and geopolitical unrest, the Indian economy demonstrates powerful resilience. The IMF lifted its 2025 global GDP forecast to 3.2%, with India's Q1 FY26 GDP at 7.8%. However, domestic concerns include fiscal slippages, weaker tax inflows, and elevated CAPEX spending, which are being monitored.

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