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Bosch Ltd’s shares have been on a roll this month. The auto component company’s stock is up almost 30% so far in April from the 2026-year-to-date low of ₹28,745 apiece on 30 March.
The stock had fallen 21% last month after the West Asia war began and the disruption in natural gas supplies forced one of its suppliers to declare force majeure. The resumption of supplies from 1 April and Bosch’s plan to fully acquire Bosch Chassis Systems India (RBIC) have aided investor sentiment.
The deal will help Bosch, a subsidiary of Germany’s Bosch Group, transition from supplying individual components to providing an enhanced range of solutions, and secure greater wallet share of the customers. RBIC is a group company that makes braking and other safety products.
It is the first mover for products such as anti-lock braking systems (ABS), electronic stability control and new braking systems. Bosch primarily manufactures powertrain-related products.
The deal’s enterprise value is ₹9,069 crore. It is largely a cash deal, with a small issuance of equity shares on a preferential basis. The transaction will be funded through internal accruals, keeping Bosch’s debt-free status intact, the management said on a call on Monday.
Analysts are not complaining.
“The acquisition is likely to be value-accretive from both an EPS and return-ratio standpoint, supported by the limited equity dilution and substantial cash deployment,” UBS Securities India said in a report on 8 April, adding that the transaction’s implied FY25 EV/Ebitda multiple of 10.6 is meaningfully lower than Endurance Technologies’ FY25 EV/Ebitda of about 21x and also its one-year forward EV/Ebitda of about 14x.
Bosch’s management expects the deal to result in 5% EPS accretion from FY25 levels. RBIC’s revenue for the nine months ended December was ₹3,533 crore, or almost one-fourth of Bosch’s revenue of ₹14,470 crore. Over FY23-FY25, RBIC’s revenue increased at a 17% compounded annual growth rate (CAGR) versus 10% for Bosch.
RBIC’s Ebitda margin jumped from 12.8% in FY23 to 19.3% in FY25, aided by increased share of high-value products, besides higher localization. In comparison, Bosch’s Ebitda margin over FY23-FY25 has been steady at about 13%.
Incred Research Services’s back-of-the-envelope calculations indicate that RBIC can record 21% PAT CAGR to ₹970 crore over FY25-FY28, which can help the combined entity’s profit after tax CAGR improve from 12% earlier to 14.5% to ₹3,200 crore.
The acquisition will also help Bosch improve its presence in electric vehicles (EVs) as RBIC products are compatible with both internal combustion engines (ICE) and EVs, unlike Bosch’s existing product lines, which largely cater to ICE-based vehicles. Bosch announced a JV with Tata AutoComp Systems last month to manufacture components for EVs within its existing product lines.
To be sure, Bosch faces increased competition amid declining mileage of vehicles because of design changes to meet more stringent emission norms.
While concerns over the core powertrain business (75% of Ebitda) prevail, the management’s favorable action to diversify revenue streams, improve the growth profile (by 200 bps) and return-ratio are comfort factors and can drive a valuation rerating, Incred said in its report.
Bosch’s shares trade at about 40 times FY27 estimated earnings. A part of RBIC’s growth is reflected in current valuations, but the additional upside from the implementation of the ABS mandate remains a key driver, UBS said. For now, the stock’s recent rally can curb sharp near-term upsides.