Ladies and Gentlemen, good day and welcome to Bosch Limited 1 KFE 2025/2026 post itself conference call hosted by B&K Securities. F rom Bosch Management, we have with us today Mr. Guruprasad Mudlapur, Managing Director and Chief Technology Officer, Ms. Karin Gilges, Chief Financial Officer. At this point, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the management presentation and opening remarks. Over to you, sir. Good evening everyone and thank you for joining the call today. I'll start with a briefing for you first and then we'll get into Q& A. In the last few months we witnessed wars in various regions, prolonged U.S. tariff discussions with its trade partners, growth disparity between developed markets and the emerging markets, sort of compounded by persistent supply chain challenges. The global landscapes are being redefined by BANI. It's a new term, brittle, anxious, nonlinear and incomprehensible to some extent, requiring new approaches at business level to navigate them as global attention focuses on the final stage of the U.S. led trade tariffs and the decisions thereof. The IMF's July 2025 update now expects global growth of 3% in 2025, up from an earlier April forecast of 2.8%. Despite persistent uncertainties, India's resilience certainly stands out as the IMF upgraded its 2025 growth forecast to 6.4%, reaffirming its role as a key engine of global expansion a mid broader uncertainty. I n the last quarter, the RBI took a series of easing measures including consecutive repo rate cuts and reduction in the cash reserve ratio aimed at boosting economic growth and improving liquidity conditions. With the inflation easing and consumer price index at multi-year low in June, the RBI is expected to pause further rate cuts to assess their immediate impact on demand and credit. Monsoon performance will be key to growth in the coming quarters. Overall, domestic reforms and government spending on infrastructure are expected to continue with visions of Atmanirbhar Bharat especially against the backdrop of global trade tensions and geopolitical conflicts. Next slide please. India's automotive industry has shown an upward trend in Q1 FY 2026, particularly in tractors and three wheelers, while passenger vehicles, two wheelers and commercial vehicles have seen mild improvements, indicating a cautious market recovery. Moderate growth was observed in passenger cars despite challenges from heavy monsoons, tight liquidity and geopolitical tensions with SUVs and CNG EV models starting to gain market momentum. Heavy commercial vehicles experience positive growth due to pre-buying ahead of the mandatory air conditioning regulations mandated by the Ministry of Road Transport and Highways for cabins in medium and heavy duty trucks manufactured from October 1, 2025. This pre-buying is driven by expectations of a 1%- 2% cost increase due to the new regulation. The bus segment continues to thrive, supported by the PM-eBus Sewa Scheme. Light commercial vehicles witnessed a slight degrowth, though passenger carriers remained stable. Goods carriers faced challenges from a softening economy and competition from the three wheeler segment, particularly in the low tonnage category. The three wheeler segment performed well, driven by domestic and export demand, and achieved double-digit growth, particularly due to EV penetration in the last mile use cases. Tractors recorded robust growth due to timely sowing, favorable monsoon forecasts, higher minimum support prices, and improved farm liquidity supported by favorable volumes of [RABI] output. While export demand is stable and electric two wheelers are gaining momentum, domestic sales and production were impacted by Hero MotoCorp's plant shutdown, plant maintenance shutdown. Next slide please. In this slide, we have illustrated the market trajectory across FY 2024, FY 2025, and FY 2026 forecast, along with highlighting the volume peaks achieved for each segment. The automotive market ended on a positive note in FY 2025, reaching an all-time high in passenger cars and sustaining the momentum in other categories. Passenger vehicles growth in FY 2026 is expected to remain moderate, impacted by high inventory levels and muted consumer demand for mini micro categories and potential component shortages for EV due to Chinese export restrictions, a key watch out for the remaining part of the financial year. New model launches may offer support to overall volumes. The overall commercial vehicle segment is projected to grow at moderate single digit owing to headwinds from evolving comfort norms. However, better financing, infrastructure revival, rural demand, and fleet replacement trends will support the growth of this segment. The tractor segment is projected to perform better this fiscal year, supported by strong rural demand, a favorable monsoon forecast, and rising minimum support prices for key crops. The two wheeler growth in FY 2026 is expected to reach an all-time high, fueled by the upcoming festive season and an above normal monsoon that could boost rural incomes. While challenges like the new OBD 2 phase- B emission norms, stricter safety norms, and high base effect pose headwinds, the overall outlook remains optimistic. This optimism is supported by easing inflation, stronger rural sentiment, and rising disposable incomes further boosted by tax rebates for individuals earning up to INR 1.2 million and a cumulative 100 basis point rate cut, together enhancing customer confidence and affordability. The three wheeler market is poised for steady growth in FY 2026, fueled by increasing passenger demand, accelerating EV adoption, and sustained last mile mobility solutions serving both urban and rural areas. Next slide please. Quarter on quarter, the mobility business has grown by 14.3% in April to June 2025 as compared to April to June 2024, driven mainly by growth in Power Solutions business by 13.7% on account of higher demand for diesel components, mainly from off-highway and passenger car segments. The mobility Aftermarket business grew at 5.2% on account of higher demand for filters, lubricants, and wiper systems. Significant growth in Two-W heeler business was seen mainly on account of ramp up in sale of exhaust gas sensors due to implementation of OBD 2 norms from April 1, 2025. The Consumer Goods business grew by 9.3%, driven by higher demand for tools and accessories. Building Technologies business declined by 65.3%, mainly due to the sale of video surveillance systems, access and intrusion, and communication systems business on a sequential quarter basis. Mobility business has grown by 5.2% in April to June 2025 as compared to January 2025, driven mainly from growth in Power Solutions business by 4.5%, driven by increased demand resulting from higher volumes in passenger car and heavy commercial vehicle segments. Two-W heeler business also grew by 39.2% over the previous quarter due to increase in sale of exhaust gas sensors resulting from OBD 2 norms implementation from April 1, 2025. The Consumer Goods business declined 20.3% due to seasonal impact. Building Technologies business declined 64.7%, mainly due to the sale of video surveillance systems, access and intrusions, and communication systems. Overall revenue from operations in April to June 2025 stood at INR 47,886 million, which grew by 10.9% over April to June 2024. The growth is driven by increase in sales in Power Solutions, Two- Wheeler, Power Sports Mobility, Aftermarket business, and Consumer Goods business. As seen in the previous slide, overall revenue for April to June 2025 declined by 2.5% over January 2025, while Power Solutions and Two- Wheeler Power Sports business segments saw a growth. This was offset by reduction due to lesser sales in Building Technologies division resulting in sale of video surveillance systems, access and intrusion, and communication systems business. Business EBITDA in April-June 2025 was INR 6,393 million, which grew by 23% over the same quarter of the previous year. The improvement in EBIT margin is mainly on account of growth in revenue and improvement in material cost. EBITDA in April-June 2025 was INR 6,393 million, which marginally declined by 1.2% over the sequential quarter. The decline in EBITDA is mainly on account of lower sales in the current quarter compared to the previous quarter. Profit after tax stood at 23.3% of revenue from operations as compared to 10.8% over the same quarter of previous year. The increase is on account of improved EBITDA margins and on account of profit on sale of video surveillance systems, access and intrusion, and communication systems business, which was recognized during the quarter. Likewise, profit after tax for the quarter April-June 2025 was 23.3% of revenue from operations as compared to 11.3% over the sequential quarter. The increase is again due to recognition of profit on sale of video surveillance systems, access and intrusion, and communication systems business. At the heart of electrification is Bosch Mobility, providing key technologies like vehicle control units and electric coolant pumps. The VCU acts as the brain of the vehicle, managing how it drives by adjusting torque and switching between all-wheel and rear-wheel drive based on road conditions. The electric pump is configured to satisfy future battery cooling requirements during fast charging. In addition, it supports simultaneous cooling of two powerful E axles. I n the Two-w heeler space, Bosch is powering multiple models while continuously improving the systems on offer to meet the market and regulatory requirements. New project acquisitions reinforce Bosch's commitment to delivering seamless engineering and manufacturing capability for India. With every rollout, we are moving one step closer to shaping the new era of mobility together in India. Next slide please. With these updates I conclude my speech. Thank you for listening patiently. We will now address your queries. Please feel free to ask your questions. Thank you. Thank you, sir. We will now begin the question and answer session. For participants who wish to ask a question, I request you to please raise your hand. Alternately, participants can also type in their question in the chat box. The first question will be from Mr. Pramod Amte. Please unmute and ask your question. Yeah, hi, thanks for taking my question. This is with regard to the Two- Wheeler business. Congrats for such a strong growth and a quick response to set up the capacity. Wanted to know, since the capacity came on board pretty fast, what's the extent of localization you have been able to achieve there? Second, is it fair to assume now Two- Wheeler as a vertical is almost a double-digit contribution to revenue? Perhaps I picked first after regarding the Two- Wheeler business and for the strong growth. Yes, you are right, we are seeing the strong growth especially in the content regarding the contribution. Of course, Two- Wheeler is a very important contributor to our overall turnover in the mobility. Nevertheless, we do not give segmental numbers. Regarding localization, we were expecting because a lot of the content is coming out of the OBD 2, and therefore we were prepared for this. This is localized and delivered from our Bidadi plant. We are happy to have the localization on board. We are more than happy to see now the ramp up in the Two- Wheeler business. Thanks. The purchase goods seems to be easing off. As you guys are also doing localization for other components, wanted to know how are customers looking at it? Do they allow you to keep the benefits with you majority or do you feel the competitive intensity has changed now and you may have to pass on some of it to the customers? I would answer the first part. This is regarding material because I think yes, we are going ahead with the localization. We also have to see the product mix because it is depending on the material cost. We have other perspective. This is what do we trade and what do we manufacture? Depending on the demands of the market, we see certain quarters where we have a higher part of the traded goods and we have quarters where we see a lower portion of traded goods. In April to June 2025, it was in favor of the manufactured goods. That means the demands from the customers were mainly out of own manufactured goods here in India. This is then of course also influencing the material costs. Nevertheless, you are right that we are going also ahead with the localization. Sure. Just to add on the pricing that you asked, these are all based on customer contracts. They vary, and we do what is agreed with the customer. Sure, thanks. All the best. Thanks, Pramod. Mr. Chandrakant, you can unmute and ask your question. I think there is no response. Mr. Sriram, you can unmute and ask your question. Yeah, two questions. Sorry, I have two questions. One is on the MoU between Bosch and Tata Electronics. How this will benefit the listed entity? Secondly, there is a note given in the quarterly financials regarding restructuring of the mobility business. If you can elaborate on this, that would be helpful. Thank you. Thank you. Okay, I'll take the first. Karin will help you with the second one. The MoU is between Bosch Germany and Tata Electronics. The MoU period is for a year to explore potential cooperation opportunities in semiconductors and OSAT topics. This is something we are exploring together with them. The MoU is actually between Bosch Germany and Tata Electronics. Right now, there is no direct benefit out of this MoU. It's a very early stage exploration with Tata Electronics. The connection could be that once we are making progress and we are able to see some localization possibilities with semiconductors, we could see some benefits going forward. This is an early exploration MoU with Tata Electronics. Coming to a second part of the question. This was regarding the restructuring mobility business. If we look from an angle from the commercial prudence and that we are looking forward to have a shift in the technologies. I give you an example, for example also a TREM 5 in the future going to a common rail. Therefore, we have to look all the time into our balance sheet and have to look at volumes, changes in product portfolio, etc. We have the principle of commercial prudence that we build up some provisions where we have it out of the calculations. That's the background. Okay, I mean just follow up on that. Is there any plan to merge the sister entities with Bosch India? We've already made a statement on this towards SEBI and continuously. See, the thing is we continuously look at opportunities on what can be enhanced, what can be divested, what can be changed in our product portfolio. This is always an ongoing ordinary course of business for us. At this point of time, I would say there is nothing concrete in any form which is worth reporting even to the regulator or disclosing it beyond that. As and when there is something, we'll get back to you. At this point there is nothing to report. Okay, sir, thank you so much. Thanks, Sriram. Mr. Chandrakant, you can unmute and ask your question. Yeah, hello. Are you getting me? Yeah, yeah. Yeah. My question is regarding this hydrogen ecosystem for commercial vehicles. Our solution is ready. Where does the government stand in terms of the hydrogen refilling stations, etc.? How long will it take to be a dominant business? I won't put a precise date and timing on this. Hydrogen is in a very early phase. Right now we are working with OEMs towards technology maturity exercise with various OEMs on getting the technology matured. As you can imagine, this also requires quite some development of the ecosystem. The generation of hydrogen, the distribution, pumping, storage, all those aspects need to be developed and installed in different areas before we can see some commercial exploitation of this. At this point of time I won't go beyond that to give a very specific date because it's maybe too early. Our focus is on maturing the technology and then I'm sure similar things are happening with the ecosystem players on how they want to get the rest of the things aligned. Thank you, sir. My second question, which is a brief one. In your global report, you have been talking about electrification and electronification in India. This electronification bit is outside the listed entity, and then in the global report again, consolidation of mobility is considered. Can we expect something to happen on electronification in the listed entity? See, I assume when you say electrification, you are referring to the electronics manufacturing that happens in our privately held company. Yes, for mobility. All I can say is there was a very good reason why it was set up like this, and the unit is more or less a contract manufacturer to us and supplies all electronics through the listed entity. At this point of time, I do not want to speculate any further changes. That is how it is. If there's any change in the structure or any change in the business operations, we will update it. Thank you. Thank you for your clearances. Thanks, Mr. Chandra. Anybody who wants to ask a question, please raise your hand. In the meantime, I'll go through the chat box. There is a question on this Johnson Controls unit equation. So c an you please provide color on recent acquisition of Johnson Controls India, how this acquisition will integrate with Bosch India operations? Yeah. This Johnson Controls Hitachi acquisition is again a global acquisition for Bosch. It's one of our biggest acquisitions so far. The portfolio is very complementary to us in terms of the HVAC for residential and industrial applications. This comes in as a separate division, which is currently not within the listed company, and it is expected to stay that way for now. There is an India operation of this, which is also going to remain that way for now. We'll see how this develops, and if there is any change on the portfolio or in the business operation, we will certainly update you. The next question is on this. From the annual report starting and what we have specified in the annual report, they have re-quoted. I'll just read that. Starting in 2025, Bosch Power Solutions India will lead the powertrain and vehicle technology business for the commercial vehicle segment. As regulatory frameworks evolve, particularly in areas like ADAS and braking, Power Solutions will spearhead the adoption of technologies in electrification, steering, braking systems, and advanced driver assistance for the Indian market. The question is whether we'll be involved in this, know this powertrain, brakings, and all those. Yeah. For the commercial vehicles, yes. It doesn't mean that all activities will happen. The business ownership will happen for the commercial vehicles area through the listed entity. Power Solutions will take that. Okay, the next question is, in our presentation we spoke about VCU for EV, is it manufactured by the Bosch entity or by the sister concern and traded now? I mean, all electronics, as I've said before, is manufactured by our sister entity which specializes in electronic manufacturing and operates more or less as a contract manufacturer for the listed entity. That is how it is currently. The sale of the VCU happens through the listed entity. Okay, we'll go to the Q and A box. Somebody raised their hands. Mr. Balasubramaniam, you can unmute and ask your question. I think it's still not there. I'll go through the chat box. Sir, we are growing at 40% quarter on quarter in Two Wheeler segment due to new projects. How long do we expect this high growth to continue? Will volumes scale gradually or its volume will stabilize after initial ramp up this year? Volumes will stabilize after ramp up. Okay, there is a question on the overseas market. Is the worst over for the auto market in Europe? Sorry, can you repeat again. In the Europe market? I s the worst over for the a uto segment in Europe. That was the question. I wouldn't say that the worst is over. As you know, the global economy, and we talked about it also in my first slide, most of the advanced economies are either stagnant, not growing, or growing very slowly. That is the trend in most of these advanced economies and thereby the auto sales are also quite muted in these geographies. I believe at this point of time we will see very muted growth in these economies. There is a question on this rare earth magnet issue. How does it impact Bosch and in your view, how will it impact the OEMs? We can answer, of course for Bosch, overall we see the rare earth topic is not only in India, not only singular suppliers like Bosch, but it is an overall topic. Therefore, of course we have, after we got the information that this is happening, implemented a task force here in India and also implemented a task force for Bosch Global where we from India are part of. Therefore we have screened all our material numbers, we have set the applications, we get strong support from our parent company, not only from Bosch China to place the applications into the right channels, but also from the overall Bosch Global task force where we have a good overview over the whole Bosch group. Where are inventories, how are the material flows? What can we do? Therefore, of course we see an impact. We see inventory coverage until end of August. We are working on several options. We are not going only for one option to reduce the risk as much as possible for the OEM itself. Of course I cannot make here a statement. I can only give you our view as Bosch Limited in India. Okay, then there is a question on this divestment. Now, the recent divestment of the Building Technologies division, video surveillance systems, access, and communication systems business suggests business focus realignment. What is Bosch approach to portfolio management, and what criteria determine which businesses to retain, grow, divest, or merge? Okay, so it's a very interesting question, question on portfolio management and I'll give you our group stance. Globally, we want to be in the top three in every segment we operate. Of course that's not always possible in all segments, but in most of the core segments that we operate, we want to be in the top three. Our effort and endeavor is always to ensure that that happens. As a consequence of that, we are constantly evaluating all our portfolio to see how to ensure that we have growth in these portfolio segments and we are able to add value and be a dominant player. Based on this, certain portfolio actions are taken and one of them was the Building Technologies division area of video surveillance systems, access and communication systems where we realized that significant additional investment, a lot of IP and a lot of change dynamics are required to make this into a top performer, which we believed at that point of time was not in our focus. That was the reason we decided to hive off. The reasons could be different for other portfolio decisions. I can't comment on that, but this was how it was felt. That's the general principle of how we look at portfolio choices. Okay, there is a question on EV, sir. The Indian market is moving toward, in two- wheelers and three- wheelers, more towards EV. How does Bosch plan to capitalize on emerging EV trends in India? What are your strategic priorities to maintain and expand market share in this evolving sector? See, we are a dominant technology supplier in the EV space worldwide and even in a very highly competitive market like China. Bosch is an extremely strong supplier of EV technologies to several OEMs in China, and we are quite dominant there. We have a portfolio which ranges from Two- Wheeler electrification all the way up to heavy commercial vehicle electrification, and we offer that to all OEMs globally. It is also the same endeavor for us in India to remain a dominant player and offer these technology solutions to all our OEMs locally. This is what we are doing. We are in good discussions with several OEMs on electrification projects right now, and we hope to have some good news in the coming months. Okay, I will just try again. Mr. Balsa Brown, you can unmute and ask your question. I think he's still, he's not able to. I'll just go through the question chat box again. Any opportunities Bosch working on ADAS? What is the outlook on this? Yeah, Bosch is working on ADAS for a long time globally. We are also supplying ADAS solutions globally to multiple OEMs, and we see good opportunities for this. Currently, the portfolio does not belong under Bosch Limited. It's with our sister company outside of Bosch Limited. We see a good opportunity for ADAS as we go forward. This is something that's currently, there is quite a lot of work happening outside of Bosch Limited. There is a question on exports, export business outlook for Bosch Limited, both on near term and medium term perspective. Any major new product line opportunities in the coming years, and any target for export in the medium term? Thank you very much for this question. We showed you already that we have implemented the new NOx in the Bidadi plant where we are currently in the ramp up and where we have also a certain volume on export on the line in the future. We see a growth in the export business. We also of course pitch wherever possible. Please be aware that in the end we have to be competitive in the landed costs. That means logistics, etc. has to be then competitive with a European plant, with the U.S. plant, etc. Yes, we are looking also permanently into our opportunities here. Wherever we have volumes free and where we can produce more, we pitch in the global network also for export volumes. Also, the question was any target in mind in the medium term? You cannot say in these volatile times where you also see the technology transfer, it is. You cannot say I have this or that target. For us it is of course in general a target. We would like to fill up our lines, and whatever is left besides the Indian market we would like to place in the international production network. Nevertheless, focus number one is the Indian market and the Indian OEMs. Continuously increasing our exports is one of our targets. I can put it that way, yeah. M. Lakshmanan is online. Please unmute and ask her question. Yeah, two questions. One is on the export side, which are the lines of businesses where as Bosch India we are competitive. Can you be specific on which business? Whether it is for commercial vehicle or this is for the direct injection or is this for the tractors? That's my first question. Second question is that how are you looking at the emission norms changes that are coming up, especially in the tractor segment, how soon it is coming and what would actually how are our OEs are planning for this and the third, in terms of your localization plan, when you had this, when you took over as a Bosch MD a couple of years back, from the target point of view which you set for yourself and for the firm, where are we? Have we met the target? Have we exceeded the target? Whatever targets you have set for yourself. Thank you. I would start with export. It is not black and white because we have lines where we are of course competitive, but there is no demand in Europe currently. We also have to see this. I can give you some very good examples where we export. This is the knock sensor, this is a spark plug, this is certain injectors where we deliver volumes to Europe. Besides the competitiveness, and we are increasing our competitiveness here in India because we have a very good productivity increase, etc. Quality, we got again several awards for our plants here. Besides this, there has to be a demand also in Europe. Therefore, it is not black and white. I can only give you quite successful examples where we permanently deliver also into other markets. Maybe just to add to that statement, normally the competitiveness is based on landed cost at the OEM or in that location. We may be competitive locally because of certain things, but logistics may not make it competitive towards a landed cost in that location. There are multiple factors and multiple elements which come in. It is not one simple straightforward answer. Every product category has to be looked at uniquely to assess whether the landed cost at the customer makes sense. Then how do we take that discussion? To give you a little bit more idea, I have another very good example where we took over for the so-called ZEXEL pumps, all volumes and the whole portfolio from Japan. We are producing it in our plant in Jaipur, and we are exporting this now to Japan. That means we are now the single source for these pumps for Japanese customers. Okay, the other two questions, in terms of emission norms and tractors and localization. Locally. Oh yeah, emission norms. I mean tractor emission norms. As you know, TREM5 is sort of on hold right now. We'll see as and when that changes. We'll update you in terms of localization. See, when I took over and we sort of communicated that the intent is to continuously increase our localization content. We are very much on track with that. As you can see also from our efforts and results, we are continuously increasing our localization content. It is not a switch on, switch off kind of a situation where overnight we can say we change everything. There are multiple other dynamics that play out in the market in geopolitics, tariffs, many other things. A lot of these things are elements which get factored into making a localization decision. If it is pure India for India, I think it's much easier to handle. If the volumes have to go beyond India, then we'll have to factor multiple other things. We are on plan and we will continuously increase localization. Thank you. Due to lack of time, that was the last question. Do you want to make any closing comments, sir? I think we've had a very good year and a very good quarter under the prevailing difficult circumstances. I believe that we are on a good track also as we go forward. We look forward to a more stabilized business environment, although I talked of BANI as a concept, but we look forward to a more stabilized business environment with a little more certainty on tariffs and how things pan out and of course also on geopolitics. Let's hope that we continue our growth track as it is right now. Thank you everyone. On behalf of B&K Securities, we thank all the participants for joining the call. Special thanks to Bosch Management for taking time out for the call. Have a good day. Thank you. Thank you, everyone. Bye bye.