Auto component major Bosch on Tuesday reported 35.04 per cent decline in its consolidated net profit at Rs 279.95 crore for the first quarter ended June 30, 2019, hit by slowdown in the domestic automobile industry.
The company, which had posted a net profit of Rs 430.98 crore for the same period of previous fiscal, said it has initiated several measures including "manpower adjustments" to remain competitive in the market.
During the period under review, the company's revenue from operations declined to Rs 2,778.82 crore for the April-June quarter from Rs 3,212.15 crore in the year-ago period, Bosch said in a regulatory filing.
The Bengaluru-based firm said the Indian automotive market is undergoing major changes as a result of various economic, regulatory, technological and market factors, including opportunities arising in electric mobility segment.
"In light of this, the company has initiated several transformation projects, including restructuring, to remain competitive. The company has set up a provision of Rs 82 crore towards restructuring, reskilling and redeployment, that has been disclosed as an exceptional item for the quarter ended June 30, 2019," Bosch said.
Bosch Managing Director Soumitra Bhattacharya said the the slowdown in the domestic market is not cyclical, but structural.
"Shortage of liquidity accompanied with build-up of inventory, will pose a big challenge and the recovery will take longer than expected," he added.
With the outlook for this sector being extremely challenging, the impact on structures, including surplus manpower, is already visible, Bhattacharya said.
He added that the company is investing in restructuring to enhance efficiencies and to be fit for the future.
"While every opportunity will be extended for reskilling and redeployment, to align with adjustment of portfolios and competencies, there will be manpower adjustments, he added.
Bosch Group in India employs over 31,000 associates.
Bosch shares were trading 3.53 per cent down at Rs 13,789 apiece on the BSE.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today