For 1QCY2010, Bosch India reported a 58.6% year-over-year growth in net sales to Rs1,596cr due to 65% growth in the auto segment and 25.4% growth in other businesses. EBITDA margins increased by 892 basis points to 19.1% due to a decline in other expenditures. Net profit spiked 310% to Rs203cr. Bosch expects continued growth in the commercial vehicle and tractor segments. The company is forecast to report EPS of Rs236.7 and Rs268.7 for CY2010E and CY2011E, respectively.

1. 1QCY2010 Result Update I Auto Ancillary
April 29, 2010
Bosch ACCUMULATE
CMP Rs4,897
Performance Highlights Target Price Rs5,374
Investment Period 12 Months
For 1QCY2010, Bosch India reported 58.6% yoy growth in Net Sales to
Rs1,596cr on the back of the 65% yoy growth registered by the Auto Segment Stock Info
and 25.4% yoy growth recorded by other businesses for the quarter. The
company’s Bottom-line, which increased by a substantial 310% yoy to Rs203cr Sector Auto Ancillary
(Rs49cr) came marginally above our expectation. OPM at 19.1% grew by
Market Cap (Rs cr) 15,376
around 892bp yoy primarily due to the decrease in other expenditure.
Recovery in the CV cycle would help the company to clock better Earnings Beta 0.3
growth going forward. We maintain an Accumulate on the stock.
52 WK High / Low 5,164/ 2,925
Performance above expectation, Top-line up 58.6%: For 1QCY2010, Bosch
India reported 58.6% yoy growth in Net Sales to Rs1,596cr (Rs1,006cr) on the Avg. Daily Volume 2748
back of the 65% yoy growth registered by the Auto Segment and 25.4% yoy Face Value (Rs) 10
growth recorded by other businesses for the quarter. The company’s Top-line
growth was largely attributed to the almost 65% yoy growth in the Diesel BSE Sensex 17,503
Systems and around 20% yoy growth in the Aftermarket Segments. For Nifty 5,254
1QCY2010 Bosch registered a marginal 892bp yoy growth in EBITDA
Margins due to the decline in Other expenditure by 541bp. Raw material costs Reuters Code BOSH.BO
were also lower yoy for the quarter and stood at 53% of Sales (56.2% of
Bloomberg Code BOS@IN
Sales). Overall low level of imported material, favourable exchange rates and
high material cost efficiency levels supported the reduction in Raw material Shareholding Pattern (%)
costs during the quarter. Staff costs fell by 39bp, which helped EBITDA Margin
expansion to a certain extent during the quarter. Overall, Bosch reported Promoters 71.2
197.6% yoy growth in Operating Profit (excluding Other Income) to Rs305cr MF/Banks/Indian FIs 16.0
(Rs102cr).
FII/NRIs/OCBs 5.4
Outlook and Valuation: Bosch's medium-term prospects are derived largely
from the demand arising in the commercial vehicle (CV) and Tractor Indian Public 7.5
Segments, which are estimated to grow at an annual rate of 12-13% and Abs. (%) 3m 1yr 3yr
5-6% respectively, over the next couple of years. Further, greater visibility in
newer growth opportunities are emerging for the company following its Sensex 7.0 53.5 25.8
investments in new and innovative technologies like CRS and Gasoline
Systems. We estimate the company to clock EPS of Rs236.7 and Rs268.7 for BOSCH 5.4 62.6 28.1
CY2010E and CY2011E respectively, owing to the overall pick up in Auto
demand. At the CMP, the stock is quoting at 18.2x CY2011E Earnings. At our
Target multiple of 20x (based on its three-year historical average multiple)
CY2011E EPS, our Fair Value for the stock works out to Rs5,374. We maintain
an Accumulate on the stock.
Key Financials
Y/E Dec (Rs cr) CY2008 CY2009 CY2010E CY2011E
Net Sales 4,620 4,822 5,846 6,671
% chg 6.8 4.4 21.2 14.1
Net Profit 633.9 590.7 743.2 843.8
% chg 12.5 (6.8) 25.8 13.5
OPM (%) 18.4 16.5 17.7 18.3
Adj. EPS (Rs) 176.1 188.1 236.7 268.7
P/E (x) 28.4 26.0 20.7 18.2
P/BV (x) 5.1 4.7 4.1 3.5
RoE (%) 17.9 18.0 19.7 19.2
RoCE (%) 19.5 16.0 20.4 21.5
Vaishali Jajoo
EV/Sales (x) 2.9 2.8 2.3 2.0 Tel: 022 – 4040 3800 Ext: 344
EV/EBITDA (x) 20.3 23.2 16.7 13.9 E-mail: vaishali.jajoo@angeltrade.com
Source: Company, Angel Research
1
Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539

2. Bosch I 1QCY2010 Result Update
Exhibit 1: 1QCY2010 Performance
Y/E Dec (Rs cr) 1QCY10 1QCY09 % chg CY09 CY08 % chg
Net Sales (incl. Op. inc) 1,596 1,006 58.6 5,005 4,763 5.1
Consumption of RM 519.2 350.7 48.0 1,554 1,567 (0.8)
(% of Sales) 32.5 34.9 32.2 33.9 (169.6)
Staff Costs 218.2 141.4 54.2 614.2 530.8 15.7
(% of Sales) 13.7 14.1 12.7 11.5 124.7
Purchase of FG 327.1 214.3 52.7 957.0 848.2 12.8
(% of Sales) 20.5 21.3 19.8 18.4 148.4
Other Expenses 226.4 197.2 14.8 1,053 942.2 11.8
(% of Sales) 14.2 19.6 21.8 20.4 144.3
Total Expenditure 1,291 903.6 42.9 4,179 3,889 7.5
Operating Profit 304.7 102.4 197.6 826.3 874.8 (5.5)
OPM (%) 19.1 10.2 16.5 18.4
Interest (24.7) (29.8) - (130.6) (128.0) 2.0
Depreciation 56.8 68.9 (17.5) 303.6 302.5 0.4
Other Income 19.3 7.3 164.9 140.2 156.3 (10.3)
PBT (excl. Extr. Items) 291.9 70.6 313.3 793.4 856.6 (7.4)
Extr. Income/(Expense) 0.0 0.0 - - - -
PBT (incl. Extr. Items) 291.9 70.6 313.3 793.4 856.6 (7.4)
(% of Sales) 18.3 7.0 15.9 18.0
Provision for Taxation 89.3 21.2 320.6 202.8 222.7 (8.9)
(% of PBT) 30.6 30.1 25.6 26.0
Reported PAT 202.6 49.4 310.2 590.7 633.9 (6.8)
PATM (%) 12.7 4.9 11.8 13.3
Equity shares (cr) 31.4 31.7 (0.8) 31.4 32.0
Reported EPS (Rs) 64.5 15.6 313.6 188.1 198.0 (5.0)
Source: Company, Angel Research
Exhibit 2: Segment-wise Performance
Y/E Dec (Rs cr) 1QCY10 1QCY09 % chg CY09 CY08 % chg
Revenue
Automotive 1,409.6 854.4 65.0 4,321.9 4,155.5 4.0
Others 174.9 139.5 25.4 516.1 493.5 4.6
Total 1,584.6 993.9 59.4 4,838.0 4,649.0 4.1
Less: Inter-Segment
4.1 2.2 16.9 29.4
Revenue
Net Sales 1,580.4 991.7 59.4 4,821.0 4,619.5 4.4
EBIT
Automotive 248.6 38.0 554.8 561.8 444.0 26.5
Others 23.3 16.0 45.6 33.9 37.8 (10.3)
Total 271.9 54.0 403.8 595.8 481.8 23.7
Add: Net Interest Income 24.7 29.8 (17.1) 130.6 128.0 2.0
Less: Unallocable Exp. 4.7 13.2 (64.3) (67.1) (61.5) 9.1
Total PBT 291.9 70.6 313.3 793.4 671.2 18.2
EBIT Margin (%)
Automotive 17.6 4.4 13.0 10.7
Others 13.3 11.5 6.6 7.7
Total 17.2 5.4 12.3 10.4
Source: Company, Angel Research
April 29, 2010 2

3. Bosch I 1QCY2010 Result Update
Performance above expectation, Top-line up 58.6%: For 1QCY2010, Bosch India
reported 58.6% yoy growth in Net Sales to Rs1,596cr (Rs1,006cr) on the back of the
65% yoy growth registered by the Auto Segment and 25.4% yoy growth recorded by
other businesses for the quarter. The company’s Top-line growth was largely
attributed to the almost 65% yoy growth in the Diesel Systems and around 20% yoy
growth in the Aftermarket Segments.
EBITDA Margin increases by 892bp on improved Operating leverage: For
1QCY2010, Bosch registered a marginal 892bp yoy growth in EBITDA Margins due
to decline in Other expenditure by 541bp. Raw material costs were also lower yoy
for the quarter and stood at 53% of Sales (56.2% of Sales). Overall low level of
imported material, favourable exchange rates and high material cost efficiency levels
supported reduction in Raw material cost during the quarter. Staff costs declined by
39bp, helped EBITDA margins expansion to certain extent during the quarter.
Overall, Bosch reported 197.6% yoy growth in Operating Profit (excluding Other
Income) to Rs305cr (Rs102cr). EBIT Margins of the Automotive business recorded
substantial expansion of 1,319bp yoy to 17.6% (4.4%). Other businesses registered
184bp yoy expansion in EBIT Margins to 13.3% (11.5%) during the quarter.
Bottom-line spikes 310%: Bosch reported 310% yoy growth in Net Profit to Rs203cr
(Rs49.4cr) for 1QCY2010 was primarily due to the higher Top-line growth, OPM
expansion, 165% jump in Other Income to Rs19.3 (Rs7.3cr) and 7.5% yoy drop in
Depreciation to Rs56.8cr (Rs68.9cr).
Capex plans for CY2010E: To capitalise on the rising demand for diesel vehicles,
the company incurred capex of around Rs2,350cr during CY2005-09 to significantly
ramp up its capacities. It has announced further capex of around Rs250-300cr to be
spent during CY2010 for strategic investments, building capacities for injectors, a
common rail system, a gasoline system and starters and the generator business.
Outlook and Valuation
We estimate the company to clock around 18% CAGR in Top-line over CY2009-11E
and around 20% CAGR in Net Profit, assuming better outlook and growth of the CV
and CRS Segments. Bosch enjoys high Margins in the Auto Component Segment due
to the high entry barriers and its dominant position in the market. However, Margins
have declined in the last three years due to the rise in import content in some of the
new products like CRS and reduced operating leverage. We estimate Bosch to
register 28% CAGR in EBITDA over CY2009-11E owing to improvement in OPM due
to rise in Operating leverage. Better utilisation of new capacities and gradual
localisation of component supplies would further improve Margins post CY2010E.
Bosch's medium-term prospects are derived largely from the demand arising in the
CV and Tractor Segments, which are estimated to grow at an annual rate of around
12-13% and 5-6% respectively, over the next couple of years. Further, greater
visibility on newer growth opportunities are emerging for the company following its
investments in new and innovative technologies like CRS and Gasoline Systems. We
believe that the company will continue to enjoy premium valuations owing to strong
parental focus and increasing long-term growth opportunities in the Indian market
facilitated by changes in Emission norms. Moreover, Bosch has been a consistent
performer with strong cash flows in the Indian Auto Component Industry.
We estimate the company to clock EPS of Rs236.7 and Rs268.7 for CY2010E and
CY2011E respectively, owing to the overall pick up in Auto demand. At the CMP, the
stock is quoting at 18.2x CY2011E Earnings. At our Target multiple of 20x (based on
its three-year historical average multiple) CY2011E EPS, our Fair Value for the stock
works out to Rs5,374. We maintain an Accumulate on the stock.
April 29, 2010 3

4. Bosch I 1QCY2010 Result Update
Exhibit 3: One year forward P/E band
6,000 24x
5,000 20x
4,000 16x
Share Price (Rs)
3,000 12x
2,000
1,000
0
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
Sep-07
Sep-08
Sep-09
May-02
May-03
May-04
May-05
May-06
May-07
May-08
May-09
May-10
Source: C-Line, Angel Research
Exhibit 4: One year forward P/E chart
(x)
35
30
25
20
15
10
5
0
Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
P/E 5 year average P/E
Source: C-Line, Angel Research
April 29, 2010 4

5. Bosch I 1QCY2010 Result Update
Profit & Loss Statement (Rs cr)
Y/E March CY2006 CY2007 CY2008 CY2009 CY2010E CY2011E
Net Sales 3,784 4,325 4,620 4,822 5,846 6,671
Other operating income 132.0 146.9 143.5 182.4 191.5 201.1
Total operating income 3,916 4,472 4,763 5,005 6,038 6,872
% chg 26.0 14.2 6.5 5.1 20.6 13.8
Total Expenditure 3,104 ,550 3,888 4,179 4,967 5,617
Net Raw Materials 1,925 2,202 2,416 2,531 3,099 3,602
Other Mfg costs 317.9 351.1 377.4 - 479.4 547.0
Personnel 390.9 470.7 520.6 614.2 701.6 733.8
Other 469.6 526.7 575.0 1,032.9 687.0 733.8
EBITDA 812.1 922.1 874.8 826.2 1,071 1,255
% chg 25.9 13.5 (5.1) (5.6) 29.7 17.1
(% of / Total Op. Inc.) 20.7 20.6 18.4 16.5 17.7 18.3
Depreciation& Amortisation 246.5 253.9 302.5 303.6 342.9 370.6
EBIT 565.6 668.2 572.4 522.6 728.4 884.5
% chg 26.5 18.1 (14.3) (8.7) 39.4 21.4
(% of Net Sales) 14.9 15.4 12.4 10.8 12.5 13.3
Interest & other Charges 6.4 3.8 8.7 - 5.8 6.7
Other Income 239.1 191.6 293.0 270.8 297.3 296.3
(% of PBT) 34.4 23.6 37.8 34.1 29.2 25.2
Recurring PBT 798.3 856.0 856.6 793.4 1,020 1,174
% chg 21.1 7.2 0.1 (7.4) 28.6 15.1
Extraordinary Expense/(Inc.) 103.4 45.7 81.0 - - -
PBT (reported) 694.9 810.3 775.6 793.4 1,020 1,174
Tax 250.3 246.8 222.7 202.8 276.7 330.3
(% of PBT) 36.0 30.5 28.7 25.6 27.1 28.1
PAT (reported) 548.0 609.2 633.9 590.7 743.2 843.8
ADJ. PAT 444.5 563.5 552.9 590.7 743.2 843.8
% chg 31.7 26.8 (1.9) 6.8 25.8 13.5
(% of Net Sales) 11.7 13.0 12.0 12.2 12.7 12.6
Basic EPS (Rs) 138.7 175.8 172.7 188.1 236.7 268.7
Fully Diluted EPS (Rs) 141.6 179.5 176.1 188.1 236.7 268.7
% chg 23.3 26.8 (1.9) 6.8 25.8 13.5
Source: Company, Angel Research
April 29, 2010 5

6. Bosch I 1QCY2010 Result Update
Balance Sheet (Rs cr)
Y/E March CY2006 CY2007 CY2008 CY2009 CY2010E CY2011E
SOURCES OF FUNDS
Equity Share Capital 32.1 32.1 32.0 31.4 31.4 31.4
Preference Capital - - - - - -
Reserves& Surplus 2,010 2,531 3,063 3,248 3,748 4,369
Shareholders Funds 2,042 2,563 3,095 3,279 3,779 4,401
Minority Interest - - - - - -
Total Loans 204.8 251.8 264.4 264 264 264
Deferred Tax Liability (154.8) (141.5) (169.7) (201.4) (232.0) (267.2)
Total Liabilities 2,092 2,674 3,190 3,342 3,812 4,398
APPLICATION OF FUNDS
Gross Block 2,096 2,339 2,722 2,970 3,260 3,523
Less: Acc. Depreciation 1,654 1,859 2,120 2,424 2,767 3,137
Net Block 442.4 481 602 547 493 386
Capital Work-in-Progress 92.7 158.3 167.1 119.1 98.0 105.9
Goodwill 6.5 6.5 6.5 6.5 6.5 6.5
Investments 726.8 1,063.8 866.5 1,336.8 1,524.7 1,979.0
Current Assets 1,960 2,063 2,704 2,590 3,148 3,540
Cash 624.9 685.8 1,070.8 1,017.5 1,222.8 1,334.5
Loans & Advances 304.0 306.3 385.3 337.6 409.2 467.0
Other 1,031 1,071 1,248 1,235 1,516 1,738
Current liabilities 1,136 1,098 1,156 1,257 1,458 1,619
Net Current Assets 823.6 964.6 1,547.8 1,333 1,689.4 1,920.5
Mis. Exp. not written off - - - - - -
Total Assets 2,092 2,674 3,190 3,342 3,812 4,398
Cash Flow (Rs cr)
Y/E March CY2006 CY2007 CY2008 CY2009 CY2010E CY2011E
Profit before tax 694.9 810.3 775.6 793.4 1,020 1,174
Depreciation 246.5 253.9 302.5 303.6 342.9 370.6
Change in Working Capital 154.7 51.6 157.2 (141.6) 83.2 64.4
Less: Other income 534.5 194.5 523 207 557 481.1
Direct taxes paid 250.3 246.8 222.7 202.8 276.7 330.3
Cash Flow from Operations 311.3 674.5 490 545.9 612 797.6
Inc./ (Dec.) in Fixed Assets 278.0 308.8 391.5 200 268.3 271.2
Inc./ (Dec.) in Investments 206.0 337.0 (197.3) 470.3 187.8 454.4
Inc./ (Dec.) in loans and
29.7 (8.9) 90.2 (57.9) 68.0 55.0
advances
Other income 239.1 191.6 293.0 270.8 297.3 296.3
Cash Flow from Investing (274.5) (445.3) 8.5 (342) (227) (484.4)
Issue of Equity - - (0.0) (0.6) - -
Inc./(Dec.) in loans 36.0 47.0 12.6 - - -
Dividend Paid (Incl. Tax) 43.9 58.9 93.8 93.7 110.2 128.6
Others (4.4) 0.8 12.1 - - -
Cash Flow from Financing 5.1 (168.3) (93.3) (94) (110.2) (128.6)
Inc./(Dec.) in Cash 41.8 60.9 385.0 (53.3) 205.2 111.8
Opening Cash balances 583.1 624.9 685.8 1,071 1,016 1,223
Closing Cash balances 624.9 685.8 1,071 1,018 1,223 1,335
April 29, 2010 6

7. Bosch I 1QCY2010 Result Update
Key Ratios
Y/E March CY2006 CY2007 CY2008 CY2009 CY2010E CY2011E
Valuation Ratio (x)
P/E (on FDEPS) 35.3 27.9 28.4 26.0 20.7 18.2
P/CEPS 22.7 19.2 18.3 17.2 14.2 12.7
P/BV 7.7 6.1 5.1 4.7 4.1 3.5
Dividend yield (%) 0.3 0.5 0.5 0.6 0.7 0.8
EV/Sales 3.6 3.2 2.9 2.8 2.3 2.0
EV/EBITDA 22.4 19.7 20.3 23.2 16.7 13.9
EV / Total Assets 7.3 5.7 4.7 4.5 3.9 3.3
Per Share Data (Rs)
EPS (Basic) 138.7 175.8 172.7 188.1 236.7 268.7
EPS (fully diluted) 141.6 179.5 176.1 188.1 236.7 268.7
Cash EPS 215.6 255.0 267.1 284.8 345.9 386.7
DPS 16.0 25.0 25.0 30.0 35.0 40.0
Book Value 637.1 799.8 966.7 1,044 1,204 1,402
Dupont Analysis
EBIT margin 14.9 15.4 12.4 10.8 12.5 13.3
Tax retention ratio 0.6 0.7 0.7 0.7 0.7 0.7
Asset turnover (x) 2.7 2.6 2.3 2.3 2.5 2.4
ROIC (Post-tax) 25.5 27.8 20.5 18.2 22.3 23.2
Cost of Debt (Post Tax) - - - - - -
Leverage (x) - - - - - -
Operating ROE 25.5 27.8 20.5 18.2 22.3 23.2
Returns (%)
ROCE (Pre-tax) 27.0 28.0 19.5 16.0 20.4 21.5
Angel ROIC (Pre-tax) 29.6 26.2 20.2 14.6 20.7 22.3
ROE 21.8 22.0 17.9 18.0 19.7 19.2
Turnover ratios (x)
Asset Turnover (Gross
Block) 1.9 2.0 1.9 1.8 1.9 2.0
Inventory / Sales (days) 42.4 41.7 40.8 42.1 39.4 40.9
Receivables (days) 43.7 47.0 50.8 50.7 51.0 51.4
Payables (days) 70.7 64.5 57.6 58.9 57.1 57.9
Working capital cycle (ex-
cash) (days) 8.8 19.5 29.0 28.9 23.6 28.0
Solvency ratios (x)
Net debt to equity (0.6) (0.6) (0.5) (0.6) (0.7) (0.7)
Net debt to EBITDA (1.4) (1.6) (1.9) (2.5) (2.3) (2.4)
Interest Coverage (EBIT /
Interest) 88.2 178.2 65.6 - 124.6 132.6
April 29, 2010 7

8. Bosch I 1QCY2010 Result Update
Research Team Tel: 022-4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com
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Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section).
Disclosure of Interest Statement Bosch
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock No
3. Angel and its Group companies’ Directors ownership of the stock No
4. Broking relationship with company covered No
Note: We have not considered any Exposure below Rs 1 lakh for Angel and its Group companies.
Address: Acme Plaza, ‘A’ Wing, 3rd Floor, M.V. Road, Opp. Sangam Cinema, Andheri (E), Mumbai - 400 059.
Tel: (022) 3952 4568 / 4040 3800
Angel Broking Ltd: BSE Sebi Regn No : INB 010996539 / CDSL Regn No: IN - DP - CDSL - 234 - 2004 / PMS Regn Code: PM/INP000001546 Angel Securities Ltd:BSE: INB010994639/INF010994639 NSE:
INB230994635/INF230994635 Membership numbers: BSE 028/NSE:09946
Angel Capital & Debt Market Ltd: INB 231279838 / NSE FNO: INF 231279838 / NSE Member code -12798 Angel Commodities Broking (P) Ltd: MCX Member ID: 12685 / FMC Regn No: MCX / TCM /
CORP / 0037 NCDEX : Member ID 00220 / FMC Regn No: NCDEX / TCM / CORP / 0302
April 29, 2010 8