Bengaluru (Karnataka) [India], Aug 13 (ANI): Technology and services provider Bosch Ltd said on Tuesday its net profit after tax declined 35 per cent to Rs 280 crore during April to June compared to the same period of the previous year.
Total revenue from operations of Rs 2,779 crore marked a decline of 13.5 per cent. The noticeable drop is mainly due to the automotive market slowdown during the quarter in all the segments, the company said. Profit before tax and exceptional items stood at Rs 504 crore.
Bosch said the Indian automotive market is undergoing major changes as a result of various economic, regulatory, technological and market factors, including opportunities arising in electromobility and mobility solutions segments.
In light of this, the company has initiated several transformation projects including restructuring to remain competitive. It has set up a provision of Rs 82 crore towards restructuring, reskilling and redeployment. After allowing for this exceptional item, profit before tax stood at Rs 422 crore in Q1 FY20.
"The automotive industry in India is going through a paradigm shift. The slowdown is not cyclical, but structural," said Managing Director Soumitra Bhattacharya.
"Shortage of liquidity accompanied with build-up of inventory will pose a big challenge and the recovery will take longer than expected. With the outlook for this sector being extremely challenging, the impact on structures, including surplus manpower, is already visible," he said.
Bhattacharya said Bosch's key investments in future technologies and innovative solutions in the mobility and non-mobility segments will continue. "While doing this necessary course correction measures will be taken in order to remain competitive in these challenging times," added Bhattacharya.
Worldwide, the automotive industry is facing a downward trend. This is also affecting Bosch Ltd's automotive sales which decreased by 17.5 per cent in the first quarter of 2019-20. Domestic sales decreased by 18.2 per cent while export sales declined by 8.6 per cent.
Though the power tools and security systems divisions show positive growth, the company's non-automotive business posted a decline of 16 per cent. This was primarily due to a drop in the energy services business.
In India, Bosch is a leading supplier of technology and services in the areas of mobility solutions, industrial technology, consumer goods, and energy and building technology. It has 18 manufacturing sites and seven development and application centres in the country. (ANI)