Buy Bosch; target of Rs 9356: Firstcall Research

Firstcall Research is bullish on Bosch and has recommended buy rating on the stock with a target of Rs 9356 in its April 2, 2012 research report.

"Bosch is a leading supplier of technology and services in the areas of automotive and industrial technology, consumer goods and building technology. Additionally, Bosch also has in India, the largest development centre, outside Germany, for end to end engineering and technology solutions. Bosch set up its manufacturing operations in 1953, and has grown over the years to 14 manufacturing sites and 3 development centers. The company is headquartered in Bangalore with manufacturing facilities at Bangalore, Naganathapura (near Bangalore), Nashik, Jaipur and Goa. The Bosch Group comprises Robert Bosch GmbH and its more than 350 subsidiaries and regional companies in some 60 countries. If its sales and service partners are included, then Bosch is represented in roughly 150 countries. This worldwide development, manufacturing, and sales network are the foundation for further growth. In 2011, Bosch spent more than 4 billion Euros for research and development and applied for over 4,100 patents worldwide."

"Bosch Ltd. has reported net profit of Rs 2811.40 million for the quarter ended on December 31, 2011 as against Rs. 2105.30 million in the same quarter last year, an increase of 33.54%. It has reported net sales of Rs 20404.50 million for the quarter ended on December 31, 2011 as against Rs 18836.10 million in the same quarter last year, a rise of 8.33%. Total income grew by 10.23% to Rs 20948.30 million from Rs. 19003.50 million in the same quarter last year. During the quarter, it reported earnings of Rs 89.54 a share."

"At the current market price of Rs. 8135.50, the stock is trading at 19.19 x CY12E and 16.94 x CY13E respectively. Earning per share (EPS) of the company for the earnings for CY12E and CY13E is seen at Rs.423.91 and Rs.480.19 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 21% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 13.36 x for CY12E and 11.93 x for CY13E. Price to Book Value of the stock is expected to be at 4.22 x and 3.38 x respectively for CY12E and CY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 9356 for medium to long term investment," says Firstcall Research report.