Bosch Q4FY20 consolidated net profit declines 80% to ₹81 cr2 min read . Updated: 22 May 2020, 09:28 PM IST
The sharp decline in net profit is being attributed to an exceptional item of ₹297 crore
Mumbai: Bosch Ltd has posted a decline of 18% in its consolidated revenue at ₹2,237 crore for the March quarter on lower auto sales during the period due to pandemic-induced lockdown.
The company’s consolidated net profit for the March quarter stood at ₹81 crore as against ₹412 crore from year-ago period, a decline of 80%. The sharp decline is attributed to an exceptional item of ₹297 crore, which the company said is the provision made towards various restructuring and transformational projects, including asset impairment.
For the complete fiscal year, the leading auto component manufacturer has reported consolidated revenue of ₹9,841 crore as against ₹12,085 crore for the year-ago period, down 19%.
The company’s FY20 consolidated net profit is at ₹650 crore, down 59% from ₹1,598 crore in FY19.
The yearly profit too was impacted by the provision made for the exceptional items at ₹717 crore towards various restructuring, reskilling and redeployment initiatives.
“These provisions are in line with the company’s transformation initiatives and has been made to capitalize on opportunities emerging in electromobility and other mobility related projects," Bosch Ltd said in a statement today.
Soumitra Bhattacharya, managing director, Bosch Ltd, in an online press conference on Friday, said that the company's performance is in-line with the downward trend in the automotive industry.
“Our margins from operations are 11.2% despite the decline in the turnover by 19%. The automotive sales in FY20 declined more than 18%," he said.
Bhattacharya added that the company’s mobility business saw a drop of 20%, powertrain business declined 24% and the automotive aftermarket business declined by 11% due to tight liquidity in the market.
“What started with an NBFC crisis (Sept 2018) and went into a deep liquidity crunch in FY2018-19 led to a strong slowdown in the market. We also saw many structural changes such as the axle load norms, which added about 20% load carrying capacity to the existing trucks overnight," the senior executive said.
“Just when we were about to get over the financial crisis, we were struck by the coronavirus pandemic and India went into the world’s biggest lockdown," he added.
The company said it has resumed operations across its six manufacturing units, which are operating at 10-20% of capacity.
“We know that the industrial recovery will be slow and we are trying to ensure that supply chain bottlenecks are removed. There will be challenges on migrant labour going forward," Bhattacharya said adding that the industry will see a very tough year in FY21.
The company expects to continue to operate its production units in single shift during May and June.