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.