Bosch Shares Drop Four Percent Despite Higher Q2 Profit and Split Plans

Shares of Bosch Ltd dropped four percent to Rs 50,375 in afternoon trade on Friday after the company announced plans for a stock split and a bonus share issue alongside its Q2 financial results for fiscal year 2027. The board approved a one-is-to-five stock split to divide shares of Rs 10 face value into five shares of Rs 2 face value each. Along with this, the board approved a three-is-to-one bonus share issue where shareholders get three bonus shares for every one share held after the stock split. Both corporate actions need approval from shareholders through a postal ballot. Together, these steps mean one existing share will turn into 20 shares after the process is complete.

Financial Growth

For the July-September quarter, Bosch reported an 18.6 percent jump in net profit to Rs 839.4 crore compared to Rs 708 crore in the same period last year. This included a one-time gain of Rs 130 crore. Revenue grew 28.2 percent year-on-year to reach Rs 7,655 crore up from Rs 5,969 crore. Earnings before interest, taxes, depreciation and amortisation increased 23.2 percent to Rs 1,037 crore. However, the EBITDA margin dipped to 13.5 percent from 14 percent last year due to higher raw material costs.

Segment Performance

Growth in revenue was driven by strong demand in passenger cars, four-wheel-drive vehicles, and two-wheelers, along with good pre-festive demand and a helpful product mix. The mobility business grew 29.8 percent sequentially, led by a 36.4 percent jump in Power Solutions and a 34.9 percent rise in Vehicle Motion. The two-wheeler segment grew 17.7 percent, and the mobility aftermarket rose 13.2 percent. The consumer goods business grew 17.1 percent, supported by strong e-commerce and accessory sales.

Context

Stock splits and bonus issues are corporate actions that increase the total number of shares in the market while lowering the price per individual share, making them more affordable for small retail investors. Even though the total value of a shareholder's holding stays the same right after the split, such announcements often create high trading activity and shifts in share prices as seen here. Companies usually time these moves when they report strong financial results and want to improve trading liquidity.