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Auto components major Bosch Ltd on Tuesday reported a consolidated net loss of Rs 120.83 crore for the first quarter ended June affected by the coronavirus pandemic.
The company had posted a consolidated net profit of Rs 279.95 crore in the year-ago quarter, Bosch Ltd said in a regulatory filing.
Consolidated revenue from operations during the period under review stood at Rs 991.54 crore. It was at Rs 2,755.44 crore in the same quarter a year ago.
The combination of the slowdown in the automotive industry and COVID-19 affected the company's sales in the first quarter of FY2021, Bosch Ltd said.
The powertrain solutions division registered a decline of 78.3 per cent.
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However, the two-wheeler and powersports product unit witnessed a good double-digit growth during the quarter.
Outside the mobility solutions business sector, business recorded a decline of 59.9 per cent. In June this year, the company witnessed a recovery in sales volumes after the easing of nationwide lockdown restrictions, it added.
Commenting on the results, Bosch Ltd managing director Soumitra Bhattacharya said that as anticipated, the financial year 2020-21 began on an extremely challenging note. The Indian economy is expected to witness sharp contraction, with GDP growth projected to be between minus 4 per cent and minus 6 per cent in the current fiscal.
"Multiple lockdowns in several states are adversely affecting the supply chain. With the ripple effect of this continuing to be felt in the coming years, we now have to do all we can to counter the business situation while exhibiting utmost care for our associates. We will continue our journey of transformation to make Bosch Ltd stronger in the future," he added.
On the outlook, Bhattacharya said,"The focus for the upcoming quarters will remain on the agriculture sector, particularly on tractor demand. However, the auto sector as a whole will take four to five years to return to the levels of 2018-19."
In response to the anticipated burdens as a result of the challenging situation, the company said it is taking measures to manage resources and costs. Agility and operational efficiencies will help optimize its core business with. To secure liquidity, extensive programs to adjust manufacturing capacity and cost structures are in place.
"At the same time, the company is preparing for a potential switch to electrified vehicles, which will lead to a significantly reduced demand for direct manpower as compared to 2018-19.
"Right-sizing the organization is therefore an urgent need. Here, the company is following a 3R approach (restructure, reskill, redeploy), in which it has invested Rs 800 crore," Bosch Ltd said.
The company also said as the Indian automotive market continues to undergo structural changes it has continued its investment in restructuring, reskilling, and other transformational projects.
"An additional provision of Rs 197 crore has been disclosed as an exceptional item for the quarter ended June 30, 2020, for this purpose," it added.
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