Recovery in CV cycle, chip supply improvement to support Bosch stock

Bosch’s operating performance in the December quarter (Q3FY22) was below street expectations. Higher raw material costs weighed on the gross margins which were down 283 basis points to 39.2 per cent. However, the company was able to limit the impact at the operating profit level to 30 basis points due to lower other expenses. 

Analysts at ICICI Securities have upgraded the stock to 'Add' from 'Sell' earlier on expectation of a pick up in the auto OEM or original equipment maker segment, semiconductor supply improvement, rising localisation and stabilisation in input commodity costs. They expect the company’s operating profit to witness a compounded annual growth rate of 33 per cent over FY22-24 after remaining flat over FY20-22.