Result Update 3QFY2013

Bosch

Bosch (BOS) reported poor results for 4QCY2012 largely due to contraction in operating margins which declined 82bp sequentially (429bp yoy) to 12.5%. Topline posted a subdued growth of 5.1% yoy (3.8% qoq) to `2,132cr, which was slightly below our expectations of `2,202cr. The poor performance can be attributed to the weakness in the medium and heavy commercial vehicle (MHCV) and tractor industries which are the key drivers of the company’s performance. While the automotive segment posted a growth of 3.9% yoy (4.7% qoq) due to slowdown in OEM sales; non-auto segment registered a 6.2% yoy (down 2.7% qoq) growth. On the operating front, EBITDA margin declined by a sharp 429bp yoy to 12.5% primarily on account of increase in raw-material costs and employee expenditure. The raw-material cost as a percentage of sales surged 140bp yoy on account of INR depreciation; while, employee expenditure as a percentage of sales jumped 290bp yoy due to negative impact of change in actuarial assumptions and wage hikes given to the employees. On a sequential basis, the margins were impacted largely due to increase in employee and other expenditure which grew by 18.7% and 27.1% qoq. Therefore, net profit at `172cr (down 38.8% yoy and 15.2% qoq) was lower than our expectations of `199cr. The net profit performance was further impacted due to high depreciation expense (up 33.7% yoy) and higher tax rate (29.7% vs 22.5% in 4QCY2012). At the CMP of `8,862, the stock is trading at 19.4x CY2014 earnings. Source: AngelBroking

Goodyear India 

For 4QCY2012, Goodyear India reported a lower-than-expected top-line of `384cr, marginally lower on a yoy basis from `395cr in 4QCY2011. While for the full year CY2012, revenue declined by 2% yoy to `1,486cr due to slowdown in auto industry. Increase in other expenses led to contraction of EBITDA margin by 248bp yoy from 8.7% in 4QCY2011 to 6.2% during the quarter. Consequently, net profit for the quarter declined by 20.7% to `16cr from `20cr in 4QCY2011. EBITDA margin for CY2012 contracted by 39bp to 7.1%, inspite of a decline in raw material cost, which was offset by higher employee expense. Thus, net profit for CY2012 declined by 14.9% yoy at `56cr from `66cr in CY2011. Source: AngelBroking