On the three parts that ADAS, body comfort and infotainment which are still outside the listco - at some point in the future as they get to more steady state, the idea would be to integrate them?
See, these are very, very small at this point of time. Bosch is not big in infotainment. We do some things. It's not very big. Body and comfort as well is a very small portfolio for us right now. And similarly, ADAS in India is also quite small but overall portfolio in India is quite small. We are big in other geographies. So as we go forward, we'll have to see how things emerge.
Can you provide the breakup of the revenue if you could give some colour on that?
Yeah, so we would like to do only a broad figure roughly; one-third is two-wheeler and the rest is then passenger cars.
Can you give a break up about the product-wise revenue and the capex that you will put in?
So, we said already about one-third 2-wheler. What we do not disclose is segmental figures. But to give you an idea of the intelligent investment logic, it depends of course year-over-year if you have to add a line, but let's say between 1.5% and 3.5% investment of the total net sales is what you also see in the business case. So very, very intelligent way of investments.
On Indian unit versus Chinese unit versus European unit, what would be the cost difference and what makes it very competitive?
The Bosch manufacturing units worldwide benchmark for cost and profitability. There are several product categories where the Indian manufacturing plants are number one, globally. That's true also for other plants. Worldwide China is also number one in many areas. It keeps going up and down. It's constantly benchmarked every quarter. But we know where things stand, what areas. So this happens on a very regular basis. What sets Chinese plants apart is a very high localized quality of supply. And that is not yet there in India and we're working constantly.
For chassis business, if you could disclose revenue mix in terms of 2-wheeler, cars. Secondly, with regards to outlook, can you talk about what are the synergy benefits we can expect from both these businesses coming through one either in terms of cost or sales team rationalization?
So, we generally do not disclose product segment wise details, that's one. And everything we can disclose pre-approval of a transaction we have disclosed and we have also uploaded in the portal so you have full access. But I am quite sure once the transaction is complete, we can invite you over to RBIC and show you a lot more about this and discuss this much more in detail.
Just on the upcoming regulation around ADAS where the ESC, ABS systems can see implementation for more than 5 tonner trucks and buses - how are we placed to take that opportunity and capture market share?
Yes, just want to reassure that we are placed very well and we are working on this opportunity as well.
On the 1st April 2026 intimation to stock exchanges referring to issuance of equity shares on preferential basis - the intimation did not mention the INR9,000 crore acquisition, nor that the issuance was to promoters and not by cash. Why was such a 20% revenue acquisition not better disclosed?
Yes the announcement relates to preferential issue only. We cannot give all the information before the board meeting about the number of shares all these things. It is an UPSI matter for us. So that is why a broader agenda item has been given. And relating to the other agenda item it is an UPSI matter which is not mandatory to be informed. As per the regulations we had given a broader agenda item to the stock exchange because these are all subject to the board approval. So that is why we have not mentioned all the details in our communication. Especially relating to the first agenda item since it is an UPSI matter it was not mandatory at all to be informed to the stock exchange.
Any update on the ABS mandate on 2-wheelers that was supposed to come for up to 125 cc 2-wheelers?
No I don't have any new update that I can share with you right now. I believe the matter is under consideration and discussion. So whenever there is an update if we hear it we will certainly update you.
Could you help us understand any sense around the capex for RBIC in the foreseeable future as a percentage of revenue?
The capex - first of all this company has the capability to make a modular approach in their products. That means you have a platform and this platform you can use again for different generations. This leads also to the fact that you have a modularity in the production. In addition, we have the advantage within the Bosch Group that we can look into our international production network. And we are capable to relocate lines. If there are idle lines somewhere in the international production network, we can also relocate them to India. So if you look at the capex overall and you can see it also in the report we have uploaded. And then we are for sure at a reasonable percentage of TNS in the capex. And we see this going forward, whenever we have a change in the generation for example in the ESP or the new braking systems we are going ahead with the localization, then this is reflected of course in the capex of the upcoming years.
Can you please talk about our market share in new braking systems or ABS or other key products?
Let's say we have in the products. Overall in this company we have a very good market share. We are competitive but please understand that we in general do not disclose KPIs on a segmental base. But we are well prepared and well placed in the market.
What would be the cash flow generated by the acquired entity in H1?
The cash we would at this point of time not disclosed. But one hint please have a look at there is a comprehensive PWC report for the valuation which we have uploaded. I don't know whether you had the chance already to have a look. This is really comprehensive and very transparent.
What is the current order book in Bosch Chassis?
Yes, see the current order book is very full. It's the market leader, very good market share across all categories and very good project pipeline for the next four to five years. So we are very comfortable with the order book situation.
What led to the change in process to bring this scheme, and the thought about selection of employees and delay in marketing of businesses? What about the other entities and the super electronics not being part of this transaction?
I think it's a very important way to look at how mobility is evolving. Within the Bosch Limited portfolio is what we call energy or powertrain. The next big chunk in the context of volumes and value is the vehicle motion portfolio. The vehicle motion portfolio carries a very big chunk of solutions which are nearly always domain agnostic, nearly always agnostic to power train. Safety itself is becoming more and more prominent. And since RBIC, the target company, has everything connected to braking and safety here, and it's doing quite well, we thought that would be the next logical step to bring it in. The company is also very good with margins right now. So on day one, it's margin accretive which is a very positive thing, very rarely happens in a transaction like this.
What changed in the parent's thought process to integrate, because it could have been an argument made 2, 5 or 10 years ago?
Yeah, so what changed? I think 10 years ago, most of this room would have kicked us if we had done it, because this company was bleeding like crazy. Massive investments, no ABS market at all. We had put in lots of money into this, and there was a lot of investment happening, both capex development application with different OEMs trying to get an introduction of ABS systems into the market. So this was not a very healthy, profitable company then. That's also the reason you see in the last four years, five years, the margin uptake has been extremely positive. So it's gone on really well. But what also changed is the fact that putting these two together now makes it a holistic mobility company.
On other listed entities like Bosch Auto Electronics - how should one understand the mix by 5, 10 years down the line because a lot of sourcing also from listed entity comes from those entities?
See, whatever truly makes sense in the listed company, we will certainly continue to look at this. So we are not saying this is the end of it. We are saying this is a continuous process. Since you brought up the other entity, which is the Automotive Electronics company - it's an entity which is totally an internal captive supplier of electronics to either the listed company or the target company. So it's a pure contract manufacturer to these. At this point of time, it was felt there's no real logic we can justify to the Board or to any of you on why we should integrate that into the current spending a lot of - into the listed scope by spending a lot of money. Because it is a very, very low margin, very high capex intensive and it is a pure supplier to this.
Is export a big driver for the entity being merged, or is it largely primarily domestic segment?
Right now, they are struggling to meet the demands of the Indian market. So export is a topic. They do some 7%-8% exports. But in the Bosch structure, our production network is set up mostly as local for local. So everywhere, even China for us is a completely local setup. China does not export to any other region. All regions have 7% to 8% export just to cater to emergencies or flying down somewhere or whatever. With the continuing trend in India of growth in volumes, growth in features, growth in new products, we see that we will continue to be heavily local. But of course, this does not rule out any exports.
Can you please elaborate the margin expansion that we've seen over the last few years? Is it related to operating leverage or is it a sort of localization?
It is actually several aspects which were all playing together. It's localization, it is of course an increase in volumes in the Indian market and it's the implementation of legislation. And if you look into the future then for example the legislation of the ABS for the two wheelers below the 125, 150 is then a further opportunity. But if you say, if you look at the last let's say five years of the company then it is a good combination that the management of this company did the right decisions and played all the parts.
Are these three plants sufficed to meet your growth aspiration or you have to invest? Will expansion be greenfield or brownfield?
We actually have one very large plant in Jharkhand. We have in Manesar an assembly unit specifically for the merger. We have in Sanand warehousing under the same. So these two are not really manufacturing but just assembly and warehousing. The current capacity, I think we are on the verge of maxing out in the current location. It's in the Bosch world, it's mostly brownfield because we have other plants and this is another synergy effect that's coming. Bosch limited has a lot of plants close to customers across India. And we have hangar space. We also have space to build hangar. So we will look at that part of the overall space plan in Jharkhand.
Are there products at the Bosch parent level which are not in India, that perhaps would be introduced?
There are products. I mean, there are some products which are pretty new. Like I said, Vehicle Motion Management Systems currently not used only by a very few select programs worldwide, not so common in many places of the world. And those are systems which will make a lot of sense as we go forward. There will also be evolution of this, for example, semi-tunnel ABS would be a great addition, cost optimized one below 100 pieces. So there will be a lot of things. Like I said, ABS, RDSP are now in their 10th generation. So a lot of new generational changes have happened worldwide as well so we can bring that in.
What is the existing ABS market share in two-wheelers?
Two-wheeler ABS, we have a very high market share. We are the market leader. And we will continue to be like that for long.
If Bosch changed the system there is substantially improvement in the gross margins in last 3 years from 34% to 40%. What is the exact reason for 600bps improvement in gross margins?
It is a mix of certain things. If you can scale and then the implementation of certain legislation. And we have a very, very fast localization of these products, which we needed for the new legislation. Very good overall efficiency, very good EPM figures, quality stable. And what we also see is a very, very intelligent method of investment. Modular setup of the platforms itself already, which helps later on if you go from one generation to the other in the production. The second thing is and this is overall what we have as an advantage in the Bosch Group is due to the fact that we have international production networks, if we are in need, let's say, of a new line or of extension of our capacities. We first look into the international production network if we have an idle line somewhere. Second-hand machinery is all the time, let's say, a little bit less expensive and this is good for our cost base.
What is localization level currently?
It depends on the product. It's like in Bosch Limited. We have products where we have a localization over 90% of the child and put all in fast because it's not all the time only the finished goods. You have to look also at the whole supply chain. Newer products, you start with assembly testing, you stabilize and then you bring in the other child parts because you have to make sure that you do not have too many variables in the whole chain.
Post-closure of Bosch Chassis, how do you think about content per vehicle for an ICE vehicle vs an EV?
What we've seen as a general trend is that when we move towards electric vehicles in general, content per vehicle and the value for vehicle goes up. I won't put a number exactly now because for example an e-axle is typically a EUR1,000 component. It's orders bigger. Content per vehicle for us based on worldwide averages, we are also by the way also top Tier 1 for EVs. Content per vehicle definitely goes up. 2-wheeler space is a bit to watch out, if you take the battery out the content per vehicle there is more space.
You also have a JV with Tata Autocomp - what product is manufactured? Will you do similar JV structures for other future products?
We are not ruling out any structure. The current volumes in the market for e-axles is very very small. It does not even fit one line of a typical Bosch line. One Bosch e-axle line produces 150,000 e-axles. The volumes are not there. They will of course grow, but we need to make the investments growth, we can't invest a lot and keep the lines idle and burn capex and have low utilization. At this point of time, it was held that we partner with a very reputed company like TACO, which is also doing already e-axles for a real car specifically. We have new acquisitions on our plate, which we will bring into the JV. And then we will try and grow this to be a very big e-axle Tier 1, e-axle JV.
On transfer pricing terms with Bosch Chassis Systems and Bosch Automotive Electronics RPTs - will they follow on to Bosch Limited?
This is normal according to the transfer price regulations and the tax regulations, if you have a delivery from the automotive electronics, it's a cost-plus and this is applicable for the whole Bosch Group in India and is in accordance to transfer price regulations. So there is actually -- it's as normal. They are subject to normal audits and the transfer pricing regulations.
On passenger vehicle side, what are the key regulations that helps for Bosch Chassis?
See, the ESP regulation, there is no ESP regulation, but thanks to the crash norms ESP is a very high fitment. All ABS is regulated so there needs to be a fitment of ABS, but everybody has already moved to the more advanced ESP system. So that's certainly helping. More safety has now become more a selling feature rather than a legislative feature. While legislation still helps crash logs, the fact that safety is something that OEMs are capitalizing to sell their vehicles already helps us go with the volume. So we see very high fitment rates with or without legislation.
Going forward will margins be steady and what are other drivers of growth?
We believe we will hold margins very steady for the next 5 years or so. Every major project that's offered from OEMs till their launch in 2031, we will fund. So our order book is very, very full. That gives us confidence to make this kind of statement that we are on a very good path. Margins will be under some pressure because everybody wants to do it differently. But we know how to manage this with the scale, with the localization, with other elements coming in, capex depreciation. We talked about 2-wheeler ABS below 125, that's definitely a big opportunity for all of us. EV is a great opportunity as EVs grow, new braking systems grow, that's a new level, new dimension of growth for us. We also see that Vehicle Motion Management systems as a more comprehensive multi-domain systems are certainly in the opportunity.
I wanted to get your top-down thought process in terms of why this business was chosen when you also have Bosch Automotive Electronics which is also related and with this acquisition of chassis, the related party transactions will further go up with the Bosch Automotive Electronics. So how are you looking at the restructuring exercise? Will it be a step-by-step or the best is behind?
Over the years we've been carefully looking at the product portfolio, what makes sense and how should we integrate it best in line with building a great mobility company as Bosch Limited. RBIC portfolio perfectly suits that and as you've seen through the slides, it's powertrain agnostic, it adds a lot of complementarity to the business and is margin accretive from day one. So everything ticks off and it's a good business case for us. The specific question on RBAI or the automotive electronics business - RBAI is a completely captive internal contract manufacturer for Bosch Limited and the target companies. So, all their supplies come to these companies at very low margin RBAI operates. But at the same time, RBAI has quite some requirements on capex and high investments over the next years. So, at this point of time, we did not find a good commercial logic to bring this business in when it does not add turnover, doesn't contribute much to the margins, and there is very heavy intensity on investments. So, we thought it's good to leave it out for now.
And on synergies?
So, synergies, you have to see that Bosch Limited and also the chassis systems are all part of the Bosch Group. That means our processes, our frameworks are very much harmonized already. We have sales customer teams which we have intensive exchange, same on the vendor side. So, therefore for the time being and also for the business case we did not count any synergies. Nevertheless, after the approval of the transaction in the post-merger integration period, we will have a look if we bring these two companies as a mother company Bosch Limited and a subsidiary for the chassis systems under one roof let's say, are there further synergies, if we dig deeper into the process landscape etcetera. But for the time being and for the business case we were very conservative and did not count synergies.
You have shown more than 25% growth in the PPD. Just want to understand what are the factors driving the growth for this entity in near term?
As I briefly touched during one of the slides, the safety and braking business is quite closely coupled with legislation. We had the ABS introduction in cars and then came ABS introduction in 2-wheelers. And in the meanwhile, thanks to the safety norms getting tightened or appreciated by customers, we also start to see bigger introduction or heavy shift towards ESP systems. So now the largest part of our activity here is ESP systems. Then we have the new braking systems because EVs started to come in and new braking systems are a whole different generation of products and they have also added additional step jump on the turnover. What continues steady is the conventional actuation systems. Of course there are potential growth opportunities with regard to higher penetration of these systems in vehicles. Volume increase of every category will yield more business opportunities. We will also potentially see some huge growth opportunities when the 2-wheeler ABS mandate come in additional categories so that could be another growth opportunity.
On the margin side we have seen a notable jump over last two years. On a sustainable basis do you see the current FY '25 kind of margin should be sustainable and maybe even see further increase?
If you look over the last couple of years and of course the scaling, new legislation, new products, additional safety features supported not only the growth in the top line but also the growth in the bottom line. In addition, the management of the chassis system did a very good job in the capex part. That means that we have carefully and cleverly put the capex and the lines in a modular way, used idle lines from the international production network within the Bosch Group to set up the capacities here in India. So and that leads overall not only to a growth in the top line but also to a growth and significant improve in the bottom line. And we see the margins as stable.
On this RBIC is it possible to share broadly how would be the revenue mix between the CV, PV, 2-wheeler if possible to share?
We can say roughly one-third is 2-wheeler and the other one is 4-wheeler. So this is more or less the share in the revenues.
Clarification on the issue of shares - we are doing 2,460 shares at a total valuation of sub INR9 crores. Is it right out of the INR9,000 crores?
Yes, out of the INR9,000 crores roughly INR8 crores are in preferential allotment. This is majorly a cash deal. Nevertheless, in the private group we have a philosophy. The former shareholders of the company Robert Bosch Netherlands and Robert Bosch US should still have a little bit skin in the game. And therefore because they were long-term shareholders of the company and supported them of course and therefore to make sure that there is a skin in the game also within the Bosch Group we went this way to have a very small preferential allotment for both of the companies in Bosch Limited.
You indicated that there were step jumps in terms of growth drivers for Bosch Chassis Systems. Could you help us understand what are the kind of growth drivers that we envisage going forward from here in terms of regulatory changes that will come up in the next three to four years?
I would say that there were several step jumps like I explained earlier which have brought us to a very good level in terms of regulatory changes and legislation. What will further propel growth for this sector is increased volumes, increased demand for safety norms and safety systems in vehicles and of course potential opportunity with 2-wheeler ABS expansion into new categories. Of course, CV is an area where we see some opportunities so that's another area to look forward to. So these would be the broad areas in addition to continued growth in safety systems across all categories and of course volume increases. EV as I said is another opportunity where new braking systems get used and that would also propel further growth.
On the JV with Tata Autocomp - could you help us elaborate on the scope of this JV and how it will shape up between the two partners?
We believe the JV is a very good step towards consolidation of volumes and of course also a lot of synergies between the two companies. Tata Autocomp comes with a great track record in this area. They've already been producing e-axles and they've also developed a very good supply chain around it. We have a huge amount of technology on e-axles and we feel at this point of time in terms of where the market is, how it's evolving, the volumes in the market today we feel a joint venture approach to build synergies, consolidate everything and take things forward would be the best way towards growth and creating customer value for this upcoming electrification wave. It's a 50-50 joint venture so we will share revenue and profitability.
The margin benefit over the last few years - revenue for this company has almost tripled since FY '19 but cost excluding raw material (employee cost and other expenses) only doubled. Is this just operating leverage led benefit or are there other benefits also that have accrued?
So as mentioned before this is multi-dimensional. Of course growth helps all the time. If you have profitable growth and new products which also includes more safety features then you have an effect out of this as well. The third part is and you mentioned it already is the localization. And this is not only the localization of the finished goods which the management of this company did in a very good and capex friendly way let's say. But it is also secondly on the child parts and on the raw material. So therefore you have a multi-dimensional and not to forget and if you look in the presentation of for example quality awards and the awards which this company won in the last couple of years, then you see a very good overall efficiency in the production. You see a very good quality level which of course helps you on the cost base as well. Very lean structures and this all together helped them in the last couple of years to significantly improve not only the top but also the bottom line.
The one-third 2-wheeler revenue split mentioned - was that for Bosch India or for Bosch Chassis?
This was for Bosch Chassis Systems. It's an estimation roughly please.
We have other entities like Bosch Rexroth in automotive segment. Is there any possibility that these entities might be clubbed under the group structure eventually?
Bosch Rexroth is not an automotive company. It's a more heavy hydraulics and pneumatics company. No we do not see synergies of bringing Rexroth into the mobility fold right now. Even globally they operate completely independent. At this point of time, this is a constant look into our portfolio on how we should rearrange and make the best for a very strong mobility company in India. That's an endeavour. We will continue. We are not ruling out anything at this point of time.
As per September balance sheet we have about INR10,000 crores of cash and investments and INR9,000 is being paid to complete this transaction. Does the acquired entity bring any cash to the now consolidated entity? And how should we think about funding of any capex going forward?
Out of the INR9,000 crores it's the equity value that means we have the enterprise value plus a certain cash consideration because you have of course a basis cash in the company left. So this is first of all, and this is we checked also the cash conversion cycle. This is sufficient for this company. The INR10,000 crores you seen in our balance sheet is of course at cost. If I look at this our funds at market value it is much better. And the third thing is we are even after the deal well equipped with cash and both companies are highly cash generative. So Bosch Limited plus the new one have a very positive cash flow of course. So overall we made sure that we have afterwards both companies' debt free and sufficient funds going forward for capex and other activities.