Sharekhan has given Buy recommendation for Bosch with a target price of Rs. 17156 in its research report issued on May 19, 2022
Sharekhan’s research report on Bosch
Bosch Ltd’s (Bosch’s) Q4FY22 results were ahead of expectations, led by better-than-expected EBITDA margin expansion. EBITDA and PAT were 15% and 32% ahead of estimates in Q4. Bosch is well prepared to tap on emerging opportunities in electrification and connected vehicles with strong technological support from its parent. We expect Bosch’s earnings to report a 26.4% CAGR during FY22-FY24E, driven by a 20% revenue CAGR and a 240-bps rise in EBITDA margin expansion to 14.8% in FY24E from 12.4% in FY22.
Outlook
We retain Buy with a revised PT of Rs. 17,156, factoring recovery in automotive demand across segments, access to robust e-mobility technology, and improving content per vehicle. The stock trades below its historical average at P/E of 20.3x and EV/EBITDA of 13.2x its FY24E estimates.