4800% Dividends Paid Latest: Semiconductor Maker Gains By Rs 4,050 YTD; Sharekhan Recommends Buying This Stock

Semiconductor maker, Bosch has witnessed a huge rally on Thursday with share price trading near its day's high and gained by nearly 2%. Year-to-date, Bosch shares have rallied by nearly Rs 4,050 per share or nearly 24% on BSE. In its latest report, Sharekhan has recommended buying for a target price of Rs 23,692 owing to rise in localisation, vehicle volumes and and emerging opportunities. Notably, investors who like dividend stocks than Bosch is also one of the dividend king stocks to buy.

At the time of writing, Bosch shares traded at an intraday high of Rs 21,248 apiece, up by Rs 414.25 or 1.99% on BSE with market cap of over Rs 62,668.09 crore.

YTD, Bosch shares have zoomed by 4,061.35 or 23.65% on BSE. In the start of 2023, the stock was trading below Rs 17,200 levels.

In the last 12 months has paid dividend up to a massive 4800% amounting to Rs 480 per share. At the current price, its dividend yield is at 2.27%. As per Trendlyne data, Bosch has delivered a total of 29 dividends since April 27, 2001.

In its latest research note dated November 21, brokerage Sharekhan said, "Post reporting below-expected operational performance in Q2FY2024, management hopes for a healthy recovery across segments during the festive season along with recovery in exports. We believe steady growth in the CV segment along with implementation of new emission norms would improve content per vehicle and gradually increase capex to support its EBITDA margin expansion on the shift in opex to capex in the medium term. The company's strong brand positioning, focus on technology, and electrification of vehicles will enable its high-growth visibility."

Given its technological expertise and support from its parent, Sharekhan's note said, "we continue to believe Bosch would be a key beneficiary of the implementation of stringent emission norms in the domestic automotive market as the increase in complexity offers it an opportunity to enhance its content per vehicle. Gradually Bosch has been emerging as the preferred complete power train solution provider for OEMs. This enables for a regular order inflow and visibility of business. The company's strong brand positioning, focus on technology, and electrification of vehicles will enable its high growth visibility."

Further, the brokerage added, "Post incorporating Q2FY2024 results in our estimates and introduction of earnings estimates for FY26E, we maintain our Buy rating on the stock with a revised price target (PT) of Rs. 23,692 on expectation of rise in localisation, increased content per vehicle, and emerging opportunity in alternative power train."

Here is the snippets of key positives and negatives for Bosch share as per Sharekhan:

Positives:

- The automotive product segment reported 150 bps q-o-q improvement in EBIT margin to 12.5%.

- The power train segment registered a 12.3% y-o-y increase and outperformed the industry.

- The automotive after sales segment registered 10.2% growth q-o-q due to rise in demand for spark plugs and
lubricants.

Negatives:

- The consumer product segment reported EBIT margin at 7.2% in Q2FY2024 against 15.5% in Q1FY2024.

- Gross margin contracted by 230 bps q-o-q due to high import content.

- Exports declined on a y-o-y basis due to a dip in injectors used in PVs in Europe and slowdown in overall overseas
markets.

Management Commentary:

- Though the structural growth drivers are in place, the growth trajectory may moderate in the coming period in the automobile sector due to election year, high base, and uneven monsoon trend.

- Management continues to focus on localisation to improve profitability.

- The company commenced road trial for hydrogen fuel engines in Q2FY2024.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.