Ladies and gentlemen, good day and welcome to Bosch Limited 4Q FY23 post-result conference call hosted by B&K Securities. I also take this opportunity to welcome the senior management team of Bosch Limited. We have with us today Mr. Soumitra Bhattacharya, Managing Director, Mr. Guruprasad Mudlapur, Joint Managing Director, and Ms. Karin Gilges, Chief Financial Officer. At this point, all participants lines will be in the listen-only mode, there will be an opportunity for you to ask questions after the management presentation and opening remarks. Over to you, sir.
Thank you very much, good afternoon to you all of you, thank you for taking part in the call today. Today, I would like to brief you on the macroeconomic policy, followed by the automotive market update, then, of course, we'll walk you through our financials, finally, we'll end with the highlights for the quarter which affects our business. The global economy continues to have a slowdown, while the central banks continue to raise their interest rates to tame the inflation, IMF is now forecasting a global economy growth at about 2.8% for the year 2023, from 3.4% in 2022. Advanced economies will grow only by about 1.3% in 2023. If you compare this to 2022, that was 2.7%.
In this background, the Indian economy is in a relatively sweet spot and is doing well and is expected to grow anywhere between 5.9%-6.5%. Of course, this is anyone's guess. We will see how the year unfolds. More importantly, till now, inflation relatively is under control, and this is, I think, one of the main focus areas that the RBI has been doing and to keep also the financial sector resilient. India has moved to become the world's third-largest automotive producer. Of course, we must remember this number of third-largest is also linked with mix, which we cannot compare with others. Overall, the automotive industry has seen an increase of 22%.
This is without two-wheelers and in the automotive production during the fiscal year 2022, 2023, as compared to the fiscal year 2021, 2022, and an additional growth of 14% year-over-year in the current quarter without two-wheeler, as compared to the quarter four of fiscal year 2022. In quarter four fiscal year 2023, the commercial vehicles market grew by 6% year-over-year, with medium and heavy commercial vehicles outperforming. They grew by +16% year-over-year. This has been led by a strong end user industry demand and pre-buying to beat the price hike ahead of the emission norm change. Tractors have done very well, colleagues. Tractor industry grew by +35% year-over-year in fourth quarter, ending the fiscal year 2023 with an all-time high, by the way, greater than 1 million.
Passenger car segment saw double-digit growth in fourth quarter. It was led by the SUV segment. The mix is very important. OEMs continue to hold a strong order book in SUV segment, which should help in cushioning the segment for some time to come. Two-wheeler, unfortunately, was a story which had two different sides of the coin, with domestic demand we, has witnessed sequential recovery and exports has seen a pretty declining trend, unfortunately. Three-wheelers continue to recover in the domestic markets while they are nowhere near the peaks of 18, 19. Exports still remain weak. Let's look at how the company has performed in the automotive market. As you can refer from this slide, Bosch domestic automotive sales, OE sales, have been better than the automotive market production.
On tractors, Bosch has, the growth is driven by higher pre-buy and onboarding by OEMs for the CPC before. Plus application on passenger cars and commercial vehicles, Bosch growth is primarily driven by market share gains in case of some key customers where Bosch has a higher content per vehicle. Additionally, there has been an increase in content due to EGT or exhaust gas treatment components for onboard diagnostic applications in passenger cars and light commercial vehicles. Let's look at how the company has performed in January-March 2023 quarter compared to the January-March 2022 quarter amidst all the above-mentioned factors. Mobility Solutions business have grown by approximately 24% in Q4 FY2023 as compared to Q4 FY2022.
There's been a growth of approximately 28% in products and sales of Powertrain, which is driven mainly by automotive sector and increase in share of content per vehicle, mainly in EGT. Automotive aftermarket has grown by approximately 15% quarter-on-quarter, mainly due to increased market demand. Of course, I had mentioned to you our Zing Plus strategy, where our aftermarket continues to do well on that strategy. Our two-wheeler business sales have also increased by approximately 18% quarter-on-quarter due to good improvement on the semiconductor supplies, which, as you know, was not doing too well earlier. Beyond mobility business sales now, this has grown by approximately 8% in quarter four FY23 as compared to quarter four FY22. Consumer goods business comprising of power tools has increased by approximately 2%.
Building technologies grew by on a low base by more than 40% on account of higher project allocation. The overall revenue from operations from January to March 2023 stood at INR 40,634 million, which is an increase of approximately 23% as compared to the corresponding period of the previous year, mainly driven by growth of product sales of approximately 21%. Mobility solution sales grew by approximately 24%, while sales from business beyond mobility solutions increased by approximately 8%. Income from services, mainly comprising of R&D services provided to our OEMs as well as our parent Bosch in Germany. While the billing for R&D services are at a healthy rate, income recognized in the books based on customer SOP dates was at INR 1,308 million.
Other operating income, which includes mainly income from lease rentals, miscellaneous income, export incentives. In the current quarter, increases mainly on account of rental income owing to the additional income for the leasing of our smart campus, which is Spark.NXT campus, as compared to the January-March quarter 2022, and the receipt of incentive from the Mega Project Scheme of the Government of Maharashtra pertaining to our Nashik plant. Our material cost as a percentage of total revenue from operations stood at 64% in January-March 2023, as compared to 64.6% in January-March 2022. However, the material cost as a percentage of net sales, that is excluding the income from services and other operating income, is at 67.3% in January-March 2023, as compared to 67% in January-March 2022.
The marginal increase in the material cost percentage is mainly on account of increase in raw material prices, including prices of electronic components. Our employee cost for January-March was at INR 3,281 million, as compared to INR 2,505 million in January-March 2022. As a percentage of revenue from operations, the employee cost stood at 8% approximately in January-March 2023, as compared to 7.6% in January-March 2022. January-March 2022 had a credit on account of reversal of provisions on actuarial valuation of employee retirement benefits. This actually means that, you know, we had a additional benefit in that year. Other expenses stood at INR 6,134 million. This is about 15% of the total revenue in January-March 2023, as compared to INR 4,803 million.
This is about 14.5% of total revenue in January-March 2022. The current quarter has seen certain one-time impacts. These are due to exchange rate, due to depreciation of INR, increased in spending related to our new business areas, higher spending on professional and other charges related to service income. Depreciation for the quarter is at INR 1,206 million, 3% of the total revenue, as compared to INR 892 million, which is 2.7% of the total revenue in January-March 2022. Increase in depreciation in current quarter is majorly on account of additions to plant and machinery and buildings. With this, operating profit stood at INR 4,018 million, and in January-March 2023, as compared to INR 3,516 million in January-March 2022, which is an increase of 14.3%.
The other income primarily comprises of interest on fixed deposits and change in market value of mutual funds, debt-based. The other income has increased from INR 872 million in January-March 2022 to INR 1,359 million in January-March 2023, mainly on account of higher mark-to-market gains on mutual funds as well as higher FD interest and therefore income. Coming to PBT and PAT. For the quarter ended January-March 2023, our company posted a profit before tax or PBT of INR 5,331 million, as compared to INR 4,315 million in January-March 2022. As a percentage of total revenue from operations, profit before tax stood at 13.1% of total revenue in the current quarter.
Profit after tax for the quarter ended March 2023 stood at INR 3,990 million, which is 9.8% of the total revenue from operations. Profit after tax or PAT in January-March 2022 was INR 3,506 million, which is 10.6% of the total revenue from operations. The BS-VI Stage-2 norms have been implemented across India on April 1, 2023, with an aim to make on-road vehicles cleaner and contribute towards the improved urban air quality. The key highlights of the BS-VI Stage-2 norms were the introduction of Real Driving Emissions for passenger cars, in-service conformity for commercial vehicles, and stringent on-board diagnostic OBD requirements. Bosch has worked very closely with OEMs and legislative authorities over the past years and contributed immensely in the smooth launch of the BS-VI Stage-2 compliant vehicles.
Our system solution approach during the release of BS-VI Stage-1 had already ensured emission and performance robustness in not only standard test cycles, but also in real driving conditions, thereby paving the way for a quick and efficient adaption for Stage 2. Bosch Limited also introduced a new cutting edge testing solutions like the Mobile Chassis Dynamometer and the cold chamber testing to validate the vehicle performance in extended environment conditions and ensure system robustness. Our OBD solutions and calibration services have also played a crucial role in enabling the OEMs to meet legislative requirements. Bosch has successfully delivered approximately 80 programs across different vehicle segments and will continue to work closely with stakeholders to improve the system performance and prepare for future legislation.
Moving on to our ESG performance, it gives me immense pleasure and satisfaction to report that Bosch Limited has been rated the number one among all auto components companies by Sustainalytics Global ESG Ratings Agency. Our risk score is only 8.3. As you know, the lower the better. At Bosch, we pursued sustainability long before it was made into a talk of the social agenda. As a result, in 2020 we became the 1st global industrial enterprise to make our own operations carbon neutral. Last year, as a part of the annual report, we summarized the focus areas of our sustainability management with a vision that describes six dimensions. I would like to thank each and every one of you for your contribution and patient listening.
Before we address your queries, that is me and my colleagues, I would like to also make a last personal statement to all of you. As you know, I retire from the services of the company on June 30, 2023. My successor, already announced, Guruprasad Mudlapur, will be addressing the next meeting. Of course, he along with our CFO, will continue to address these meetings. The team at Bosch and the transition at Bosch has been done in a very well-planned manner.
The team is an excellent team. They will not only keep the company as it has remained relevant, not just for our customers, but for the government, the society, the stakeholders at large, with the Bosch ethics and values, but I am sure that they will take it to the next level, including not only strengthening our core and rewired the core, but also addressing the very important part of the future core or the new business areas where our parent has all the strengths and they will utilize to regionalize, to have our strong umbilical cord functioning, and you will get the same transparency and of course, at an even higher level. With that, I bring my colleagues into play for all the question and answers that you have.
I want to tell you that it's been a pleasure for me to talk to you all these years.
Thank you, sir. We will now begin the question-and-answer session. Ladies and gentlemen, at present, you are all in listen-only mode. For participants who wish to ask a question, I request you to please raise your virtual hand. As the moderator, I shall be able to see your raised virtual hand, and I will invite your questions in turn. Alternatively, participants can also type in their questions in the chat box. Please address your question to all the panelists. We will now wait for a moment as the question queue assembles. The first question is from Pramod Kumar. Please unmute your line and ask your question.
Sir, wish you a great time ahead, as you kind of spend more time on the personal front. Congratulations on a great transition and leadership so far. My first question is on the semiconductor situation. The Indian companies have been complaining about very, what do you say, volatile supply chain situation on the semi side for the last few months as well. Looking forward from your vantage point, especially from Germany, where you are today, how does the supply situation looking from your perspective, sir, for Indian OEMs, as you look forward into FY 2024?
Thank you, Pramod. This is a very important point, we have been constantly addressing it. Look, Pramod, we have to look at it on a worldwide basis and not on an Indian context. The semiconductor situation on the FY 2022, 2023 had huge challenges across the world and therefore also India. Relatively compared to the past, there are a better stability, but we are worldwide, not out of the woods, and therefore India is also not out of the woods. Even in the last few months, there have been temporary issues, you know. Because, A, the supply chain is extremely complex. B, the supply chain is across the world. C, you may have heard that some of them had some quality issues, some of them had some structural issues.
Even one particular semiconductor had a fire, you know, and which was a coating supplier. I'm just giving you some examples. In summary, A, the supply situation relative to a very turbulent FY22, FY23 and FY21, FY22 is relatively better. Individual supplies, either fire or supply chain issues or structural issues or quality issues cannot be ruled out, which then affect different parts of the world, including India. I'm not even talking now about the war that's happening or China, Taiwan. Those are bigger items. In summary. More stable. Semiconductor can never be addressed from the India approach only. It's a worldwide matter. Our global task force in Bosch do a excellent professional job. Thereby India, like many other countries, also gets its shares, and thereby our customers get their share.
We are totally dependent on the situation, on the individual semiconductor, and those companies have backend and front-end plants all over the world.
Fair enough, sir. Sir, second question is on the revenue outlook or the growth outlook, what you shared. Because if I look at FY 2023, your underlying customer segments, be it tractors, be it commercial vehicle, be it passenger cars, had a phenomenal volume growth. The revenue growth for your key customers were like north of 30%. We had a below a growth rate which was below them, most of our key customers.
In that context, when everyone is talking about industry growth, kind of segment growth slowing down, be it in commercial vehicle, be it in cars, and even three-wheelers and other categories, and tractors particularly, why are we guiding for a healthy double-digit growth outlook when underlying segments growth may not be more than 5%, 6%? What is the disconnect between FY 2023 performance versus, say, what you're guiding for FY 2024?
Pramod, first of all, for FY 2024, we don't give a guidance. Let's talk about FY 2023. For FY 2023, if you have to be very specific. You have to now say passenger cars. The passenger cars in FY 2023 production was 4.576 million. This was against the peak of 4.070 million in 2018, 2019. Within passenger cars, you have to look at the mix. The mix has changed and favorable of SUVs. Whether you look at passenger cars, whether you look at heavy commercial vehicles, where the peak was 480,000 and FY 2022, 2023 was 397,000, we have improved on the content per vehicle. Whether greatly in heavy commercial vehicles, in medium commercial vehicles, and also in passenger cars.
Of course, tractors, you know, we play a pretty good role. The tractors went to INR 1 million, which crossed even the higher peak of, you know, INR 970,000 or the peak of 2018-2019 of INR 900,000. Content per vehicle for Bosch has gone up. Market has grown. You have to always look at it as a mix, otherwise it will be a generalized question. Lastly, for 2024 now, while we will not give a guidance for the company, we can say that we will have a healthy growth also for FY 2023-2024. We expect the market to grow on the already high level of FY 2023.
Sir, apologies. In the press release, I think you made comments that you expect total revenues from sales to grow around 15%. I was referring to that.
Yes, yes. Look, that is something that last year we also said, and we outperformed that. I told you, a healthy growth of 15% we expect, but I'm not going to say whether it's going to go towards 20 or 22 or whatever. If you remember last year also we said that, you know, we are expecting to be at 15% plus, and let's see how the market performs. You know, at the end of the day, these are all under normal circumstances. Suppose there is a circumstance which of, you know, COVID happens or the war happens in this part of the country or this side of the world, you never know. These are all under normal circumstances. We expect India to grow well, based on normal. This has a lot of riders to it.
Yeah, yeah. That's what I was trying to understand, because the growth for a few customer segments is gonna moderate materially and we are talking about a significant outperformance. That, that was the context. But yeah, I think you've explained it well. Thanks a lot. I'll get back in the queue, sir. Thank you.
Thank you, Pramod. Mr. Jayaraj, you're on mute.
Sorry. Yeah. Next question is from Dinesh. You can go ahead with the questions.
Yeah. Thanks, Jayaraj. Congratulations to you, sir. Wish you all the best for the next stage of your life. My question pertains, first clarification on the staff cost. We have seen a substantial increase vis-a-vis previous quarters, not just on YY but also on QQ basis. Is there any one-off in this quarter or this is more of a sustainable run rate?
Look, first of all, Sridhar, sorry, Dinesh, you know, our employee cost, as you know, if you look at three years or four years ago, where we had even touched 14%, we have made a major sustainable downward change. This has happened through our 3R programs. This was over three years. You have to keep first in mind where we were, and that was about 13%-14%, and where we are. That context is very important. The second point on this context, there'll always be some minor changes. This will be due to, you know, year-end increments, annual salary amounts which get paid, which of course get utilized over the year and things like that.
I would say our employee cost as a % of revenue from operations will always remain now at an optimal and healthy level. We are focusing on the quality of the part, not the %, in terms of upskilling our people, in terms of taking care of, you know, relevant competencies, whether it is blue collar, whether it is our leadership or whether it is our managerial staff. In summary, I would say please, Dinesh, look at two things. One, where were we as a company for the past so many years, and now where are we? We are about anywhere between 4-6 percentage points lower. Second, there will be some minor changes always. Third, let's look at beyond the number. Is the company progressive to look at GPTW, where we have scored for the third time in the top quartile?
Is the company looking at training, competence? We are doing it.
Got it. Got it.
Will continue to be there, whether it is accruals, whether it is, you know, actuarial valuations, whether it is, you know, these increments and all that. Don't get bothered about it.
Sure. Sure. Second clarification on the traded goods on our RN cost. That has also seen an increase materially vis-à-vis third quarter. This is especially in context since we started our localization plant in 3Q. In that context, does this increase? Is it something to do with the OBD transition, where the sensors and electronical parts would have seen increased sourcing from our sister concerns?
Traded and manufactured will always have these small changes. Because, you know, as you move up the ladder, which I've explained multiple times on both rewired core and new core, Bosch has always followed a policy of first trading. When you have a higher mix as well as content per vehicle, then we will always have a chance also for traded, a few percentage points becoming higher. As we go along, those traded goods then get localized over time. Yes, you are indirectly right. When you look at the mix I told you about, whether it is our OBD, I told you about the emission norm changes, BS-VI Stage-2. Like earlier when we changed from BS-IV to BS-VI, the same thing happened. I would say, please look at traded goods as two parts.
One, mix changes will have an impact on traded goods for some time. We kick in localization based on volume. Again, some other traded goods will come in based on, again, legislation. This will be an ongoing process. We will continue to localize. We will continue to have traded goods depending on emission norm changes and depending on our localization program. One thing I can assure you, Bosch India as a group and Bosch Limited as a company will continue to focus very clearly on localization at the right optimal times.
Got it. Got it. Lastly, in the press release, we have talked about content increase driven by exhaust gas treatment. Is this also driven by the OBD2 change? Logically, it should not be the case. Is this over and above content of SCR? Can you clarify on that as well?
I've told you about the BS-VI Stage-2, also told you about the OBD, and also this is linked to the EGT components. If you look at the total mix and mainly coming from the powertrain, yes, our content per vehicle has significantly moved up. The first set of content that moved up was from BS-IV to BS-VI Stage-1, then from BS-VI Stage-1 to BS-VI Stage-2. Later, content per vehicle will also have a change when we have the TREM-IV to TREM-V.
Okay. Okay. This EGT would be made in-house, unlike SCR, which is sourced from third-party vendors. Is that correct understanding?
No, Dinesh. We take from the best party and from the best source, and we decide what we do in-house and what we do from third party or our partners. We always, you know, we don't get into a overall scheme of just trying to localize for localization. We will continue, and this policy is applicable for EGT, where EGT has multiple components. There are levels of expertise, whether it's coating, whether it is, you know, different other components that where Bosch primarily would not go to but will continue to work with partners.
Got it. Got it. Great, sir. Thanks and all the best.
Thanks, Dinesh. Next question is from Hitesh Goel. Please unmute your line and ask your question. Sir?
Endeavors. Sir, my question is on this, you know, we can understand your content per vehicle will increase basically in FY 2024 because of these new norms which are coming through, right? Post that, do you see any major change which can increase in terms of emissions, which can lead to increase in content per vehicle except for the tractor with, chain that you have highlighted?
Hitesh, this is a very generic question, don't get me wrong. Content per vehicle increases based on what is happening on the mix. Yeah. The mix is then linked to a change in the, you know, roadmap, legislation roadmap. You have to be a little specific. For example, you know, there was a change in two-wheeler from carburetor to injection, or there's a change in FIE for TREM-IV to TREM-V, or there was a change in our mix from BS-IV to BS-VI to Stage 1 to Stage 2. We use those changes. You know, in the emission and legislation roadmap, there are some eight lines parallelly running. You know, the eight lines can also become 10 or 12.
You have to really look at each line, you know, whether it is CPCB-IV plus, whether it is TREM-IV to TREM-V, whether it is BS-VI Stage 1 to Stage 2, and whether it is, you know, for the two-wheeler and so on and so forth. There Bosch works at each stage on. Because for us, our parent has already gone through this. In summary, India was 17 years behind Europe about eight years ago. Today, we are approximately five years behind Europe. Luckily, our parent has gone through most of it, and we use our parent's expertise, then we regionalize the approach, and we start working well before the launch. That's how. In summary, yes, content per vehicle has gone up, but not suddenly.
It has happened over a very clear unfolding game plan. This is for PS. What you're not seeing is many of our sister plants who support Bosch Limited take our ECU manufacturing unit where my colleague, Guruprasad Mudlapur, who's going to succeed me, was the MD. There also there are changes for the entire ECU, and those new ECUs come and fit into different vehicles, different applications. Bosch in India is Bosch Limited, plus supported by many of our sister legal entities. It has to be a little more specific, but overall, yes, content per vehicle has gone up and we focus on this route, not just when you see it, but well before and, according to... Guru, would you like to add a couple of things?
Maybe just as a general rule, I think you covered it all, Soumitra Bhattacharya. As we move towards more advanced technologies, and regulations, be it in the form of emissions, safety or connectivity or other forms, content per vehicle or the complexity of technology goes up substantially. The electronics content has also gone up substantially over the last few years. It has always been our endeavor to have the most latest technology on offer for these technologies and regulations. We've done that globally. We are doing that also in India. Sometimes you see this with a lag while we may have been talking to the OEMs or to the government and offering technologies, maybe three, four years in advance.
What you see as results come maybe three years later. In that sense, it's a constant endeavor of Bosch to keep on increasing our content per vehicle to a substantial level as we move forward. Electronics is one good example from cars which had just one ECU or two-wheelers which had no electronics at all. Today, we are at levels where we have multiple ECUs and multiple electronic control units for different functions in different vehicle categories.
Great. Thank you. Thank you very much for the detailed answer.
Thanks, Viraj. Sorry. Thanks, Hitesh. Next, caller is Viraj. I have unmuted your line. You can ask the questions.
You know, it was really nice interacting with you. Just a couple of queries I had on the business side. First is, you know, so, you know, I get the sense that your content is increasing with each regulation. If one were to just understand our volume performance and especially our market share in different end segments, say CV, MHCV, tractors, PV. Where I'm coming from is if I look in the past, there was a phase where we had lost business, say with some of the customers in CV or there was a change in terms of mix, fuel mix in PV also impacting us.
If one were to just understand the market share positioning across different segments and different fuel mixes, you know, say in 2023 versus what it was, say in 2018 or 2019, what would that be? You know, that would probably give a sense in terms of how our acquisition strategy has played out in terms of market share. That is first question.
Viraj, I'll give you a very clear answer. We do not discuss market shares. That's a guidance question. You know that we were very relevant players in tractors, in M&HCV and in passenger cars, and we continue to remain. We have got good acquisitions in two-wheelers, not only in the fuel injection system, but we have also in the brakes, which is a separate legal entity, but works very closely. We have also in the connectivity and so on, so forth. I'll just give you an example. We had the highest ever acquisition last year. That should tell you something. Now, if you ask me segment-wise, directly or indirectly, market share, we are not going to give that, neither for tractors nor for others.
yes, the highest ever acquisition for year 2022, 2023 can give you an indication, including for Bosch Limited, including for Powertrain, that we are on a good way. I trust you are okay with that.
Okay. Second question is lastly, you know, in terms of value addition and, you know, if I look at our sales performance, especially in the mobility, you know, we have the highest ever sales and, you know, what we are seeing that next year this will further grow. If I look in terms of the value addition, especially at the gross level, you know, we have one of the lowest ever gross margin performance in decades now. I understand there's a change in terms of regulation and hence we shift to trade it. If I look at the unit level in each of the end markets which we cater to, each of these markets have either crossed the last peak or, you know, we are pretty much close to the last peak in some cases.
In that sense, you know, with the major regulation change now over, especially when it comes to, say, CV or PV that behind us, how should one understand the value added or the contribution margin for us? And this is little perplexing because, you know, when I look at the shareholder approvals also, we have also asked for a further increase in sourcing from parent, from other group entities in India. In that sense, how should one really understand, you know, the value addition we will do at Bosch Limited, and in that sense, the gross margin in this business for us?
I will make a couple of opening sentences and maybe hand over to our CFO. I'll just give you some very important overall statements which you may want to connect the dots. Number one, when you look at margins, you should look at it at two levels. Number one, are we playing the game to ensure that we have a long-term acquisition plan in relation to the changing legislation environment? I think there you can clearly see, based on our very high acquisition, based on content per vehicle, and based on our growth, we are and will continue to remain a very strong and relevant player, including with the changing times. That's one I'd like to leave, you know, as a thought for connecting the dots without giving guidance. The second one is your result of your margins on EBIT or EBITDA.
You know, our EBITDA is better than our EBIT because we have a pretty, you know, increasing depreciation because we are continuing to invest for the future. EBITDA, when you look at a double-digit EBITDA, I would say it's not a bad performance. You are comparing this number with a number which was predominantly diesel, you know, for the last 30 years. I'm sure you're comparing some of the numbers with, you know, five years, eight years ago. Let's put it this way, it's apples and oranges. The third part is based on the transition where diesel, as you know, you know, about six years ago, diesel was at 48% of market share. Today, diesel has a 20% of market share. We continue to do a double digit in spite of the change which has happened.
The third part is we nurture also new businesses. We put in money for new businesses. We are putting in money to ensure that we are nurturing the future. We have put in money for our project house electrification and hydrogen. You will not see the, you know, results right now, but what all of you are concerned is, are we preparing for the future? Answer is yes, we are preparing for the future. You remember many of you asked me a question, "How long will we have the CR program, and how long are we going to put in big tickets on the P&L?" We had put aside INR 1,500 crores, and you can see the result today.
You have to trust this management for doing the right steps at the right time, not looking at quarterly results only, but looking at staying relevant and staying profitable. Over and above this, my colleague.
Yeah. Thank you very much for the question. Yes, Soumitra gave you already a couple or most of the perspectives. I would like to add also what was said beforehand, which is very, very important, this when is a good time for localization. With the changing content in the vehicle and of course, as Soumitra also explained, already we start with the traded goods to come then into a localization. This we are also driving forward of course, and this is also perhaps an additional perspective to this was what Soumitra already told you.
Okay, just last question. you know, parent in the recent press release, analyst meeting, they talked about revamping the mobility unit. They're looking at seven different segments, including a software, dedicated software segment, and then also an electronic electrical drive unit. In that sense, for Bosch Limited, you know, if you can provide some perspective, how does it impact us? You know, what additional opportunities or not, you know, may come by in the recent entity.
I'll give a sentence or two and then hand over to my colleague. He is most suitable to answer in details because he has actually worked in these areas. Let me tell you one thing, Viraj, that Bosch Limited has an advantage of also having these big-ticket sister companies around us in India, including this very big-ticket company, not just from turnover and people, but also from importance and strategic importance located out of India, which is called the Bosch Global Software Technologies Private Limited. Now, this company caters 93% of its turnover for catering to Bosch worldwide, but also India. We have a very strong umbilical cord between Bosch Limited and what we call in short form, BGSW, and where we do a lot of work together, which helps India.
Of course, they do R&D and work for the Bosch global world end-to-end also. With that, on matter software, which is going to be very relevant and prevalent for mobility in the future as a tech stack, I hand over for Guru to give a brief answer on that.
Yeah. Thank you, Soumitra. I think the context for your question is basically in, we need to understand from what is happening in the mobility world today and what's happening with some of our OEMs, especially the more advanced OEMs. How are they looking at technical architectures or e-architectures in vehicles moving forward? What is evolving now very strongly is a very clear domain focus, be it domain as in energy or mobility, a domain as in electrification or ADAS or connectivity or infotainment. These are becoming more standardized and we start to get requests from OEMs purely based on domain architectures.
This also increases quite a lot, the complexity on electronics and, so electronics as a horizontal cuts across multiple domains, and the domain controllers manage many of these domains. On top, sits quite a huge layer of software. Many people have called cars, mobile phones on wheels, for a good reason, because the mobility world starts to emulate many of the things that the mobile phone world did some years ago. When the mobility architectures are evolving in that direction, it's also important for us to internally reorganize ourselves, not necessarily in the context of companies and entities, but in terms of how we do business towards the external world and how we face the external world much better.
Now there is a request to provide an L3 ADAS solution, and that cuts across, for example, steering systems, cuts across electronics, control units. It cuts across braking. Many of these things get together. The tier one ability to put together solutions like this makes a lot of difference. This is the evolution that our parent talked about in the previous press conference. Within India, we are also now starting to look at how relevant is this for the Indian market and when is it appropriate to reorient ourselves in this direction. We're working on restructuring ourselves in line with what the Indian OEMs may require as we move forward, some of, for whom, we are very closely talking to on these concepts.
Of course, the global OEMs who talk to us at a global level are simply transplanting their structures also in India. This is the background for you. The work is in progress. As we move forward in the coming year, we'll keep you updated on that.
Sure. Mr. Bhattacharya, wish you good luck in your future endeavors. Thank you very much for answering questions.
Thank you very much. Take care.
Thanks, Viraj. Next is from Priyaranjan. Please unmute your line and ask your question.
Yes. Thank you, and wish you good luck, Mr. Soumitra. Just couple of questions. One is on the GDI, which I think is one of the area where probably the growth can be potentially higher as we move towards the more emission norm and compact engine, et cetera. How do we see our opportunity size in that? Second is on the future emission norm. I think the OBD2B will also be coming probably in 2025 April or FY 2026. Our acquisition will be much, much higher in OBD2B for the passenger car and the trucks in the OBD2 and RDE, et cetera.
Udo, what do you want to-
Yeah. You sort of gave the answer within the question itself, so I would only concur with what you said. Yes, GDI is an important technology, already pretty standard in the advanced world, coming over the last couple of years in some segments in India in passenger cars. We will see more GDI coming in multiple other segments of pass cars as we move forward. We certainly see this. Also with the dominance of diesel coming down, there will be much more GDI happening in India. OBD2, of course, you answered it yourself. It's certainly something that we are very, very active on. Where we are closely watching is the constant shift of goalposts.
Soumitra already talked about it, that's not really so conducive for investments right now. Yeah, connecting back to some of the earlier questions on why the fluctuation happens in our the way traded goods comes in and localization happens, I think the answer is like this. The way goalposts keep shifting does not really help quick investments. This is something we're very closely watching on how to manage and work with the OEMs to get this going.
Sure. One more question on the dividend policy now. This year you have probably given 100%. Is it the new norm which we are expecting in future? Or, I mean, any thoughts on the dividend policy?
Yeah. Look, it's a very good question. We have shared very clearly why we have done it. This is an exception. We have had, 100 years, which is also an exception, and we've had also a very good year. It's not going to be the norm, but it's going to be an exception, while ensuring that we give always a healthy payout, meeting also expectations of minority shareholders and our parents, every.
Sure.
For one time. Yes.
Sure. Sure. Just on, you have called out certain one-offs in, the other expenditure, et cetera. If you can just help me understand what is the kind of nature of those one-offs as well as the quantum, if for the last quarter?
Yeah. In the last quarter, in the other expenses, we had certain one-time expenses like depreciation in the INR where we have an exchange rate impact. As mentioned before, very important spendings in the new business areas, which is all the time the investment in the future of us where we have to start besides our core business. Also some spendings in professional and other charges related to the service income. You see the impact in the other expenses, but you see as a counterpart then also in the other income. These are the main three one-time impacts we saw in this quarter.
Any call out for the basis point impact on overall?
Pardon me?
Any call-out for basis point impact or, I mean, the quantum of impact?
These are one-time impacts. Of course, if we invest in new business areas, then we will see a fluctuation in this other expenses also on a quarterly basis. Depends, of course, all the time, how investments, for example, in these areas are going onwards.
Understood. My last question is on, I mean, two, three years back, we have created a subsidiary under Bosch Limited for the e-mobility, and I think we have not invested enough in that subsidiary. Kind of, when can we expect the substantial investment in that subsidiary for the plant, et cetera, so that, I mean, the business can start generate enough growth, et cetera?
Yeah. We've done good work on the project house, electromobility and hydrogen, as I mentioned. We will link it to that company as and when we need to do things, and we are evaluating the options.
Sure. Okay. Okay. Got it. Thank you. Thank you. All the best. Cheers.
Thank you very much.
Thank you.
Annamalai Jayaraj, we are at, I think.
Last five minutes, sir.
Cut-off time.
Yeah. Only one caller can we take, sir?
Okay. Sure. Sure. Always for you.
Yeah. Thank you, sir. Thanks to your engine. The final call is from Aman. I'll unmute your line.
I have a question on the product side of Bosch. You guys have an EFI product, whereas one of your competitors has an e-carburetor product. I'm just trying to understand as to what the OEMs are preferring. Do they prefer to go with the EFI or do they prefer to go with the e-carburetor?
We have always stated that we strongly believe not on the e-carburetor. We would not like on what others would state or do. We are talking completely based on technical situation, including what the future is. We have stuck to it, and we would not like to make comments for others.
Oh, okay. No worries. Thank you.
Thank you very much, Aman. With that, I think we can close.
Yeah. Sir, we thank Mr. Soumitra Bhattacharya for participating in all our investors conferences and patiently answering all our questions. Wish him all the best for his future, whatever he wants to do. We welcome Mr. Guruprasad Mudlapur for the future calls.
Thank you. Thank you.
Thank you.
Thank you very much.
Thanks. On behalf of B&K Securities, we thank all the participants for joining the call. Special thanks to Bosch management for taking time out for the call and giving us the opportunity to host the call. Have a good day.
Thank you.
Thank you. Bye.