Bosch "Beyond the ICE age; upgrade to Buy" (Buy) Kumar

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Bosch "Beyond the ICE age; upgrade to Buy" (Buy) Kumar

EPS (UBS, diluted) (Rs)

business could accelerate further if ABS mandate is extended to sub-125cc two-

From To % ch Cons.

wheelers, which account for ~80% of the total industry's volumes. 03/26E 805.69 750.84 -7 751.85

03/27E 882.93 777.79 -12 905.70

Recent JVs provide incremental upside 03/28E 946.44 906.97 -4 1,013.10

Bosch has formed JVs with Tata AutoComp for e-axles and electric motors, and with

Pramod KumarBrakes and Wheels India to develop electronically controlled smart actuators for air and

Analyst

pneumatic systems in commercial vehicles. Bosch Global has also previously operated a pramod.kumar@ubs.com

20:80 JV with Knorr-Bremse in the CV air braking systems segment, highlighting the +91-22-6155 6063

group’s experience in this business. In our view, these initiatives provide incremental

Vedant Kshatriyaupside potential; however, given the limited visibility on their scale and financials, we do

Associate Analyst

not currently factor any contribution into our base case. Our analysis indicates that the vedant.kshatriya@ubs.com

domestic TAM for e-axles could be sizeable, at around Rs30 bn by FY28E, assuming a +91-22-6155 6008

20% CAGR in EPV and ELCV volumes over FY26–28E (Figure 10DomesticTAMfore-axlesunderdiferentscenarios), supported by strong

EV adoption. Additionally, component companies with exposure to motor- and gear-

driven segments typically benefit from superior margins relative to more diversified

component players, which could support profitability as these businesses scale up.

Valuation: Upgrade to Buy; SOTP-based PT up from Rs27,920 to Rs45,530

We value the core business at 35x one-year forward EV/EBITDA (vs. 30x P/E earlier),