THIS WEEK · EMERGING MARKETS

Co-owners,

We've spun the wheel for the Emerging Markets bucket and landed in India for the second time, on a name you already know, probably from a drill, a dishwasher or something under the bonnet of your car. The surprise is how it got into your index.

Before we dive in, a reminder of what the index itself has delivered over time.

Bosch Limited

Try to buy a share of Bosch and you'll hit a wall. Robert Bosch GmbH, the German giant behind the fridges, drills and car parts, made ~€91 billion in sales last year and employs ~413,000 people. It isn't listed anywhere. 94% of it belongs to the Robert Bosch Stiftung, a charitable foundation, as its founder wished.

There is one door in. Bosch Limited, the Indian arm, trades on the Mumbai stock exchanges. Bosch Germany owns ~71% of it. The rest belongs to the public, and that includes everyone holding a world index fund.

A factory instead of a shop

Bosch arrived in India in 1922 with a sales office in Calcutta. After independence, India closed the door on imports to build its own industry. If you wanted to sell in India, you had to make things in India.

So in 1951 Bosch took 49% of a new company called Motor Industries Company, MICO for short. Two years later it opened a factory in Adugodi, then on the edge of Bangalore. By 1961 around 2,000 people worked there, and Bosch had taken control. MICO only took the Bosch name in 2008. The head office still stands on that first factory site.

What you actually own

The engine room. The biggest business makes fuel injection systems, the precision parts that spray diesel or petrol into an engine. They sit in India's trucks, cars and, above all, tractors. After a good monsoon last year, India built 1.24 million tractors, 22% more than the year before. The Jaipur plant is now taking over Bosch's entire production of one type of injection pump from a factory in Japan.

The motorbike sensor. Since April 2025, every new motorbike sold in India must monitor its own exhaust. That takes an extra sensor, and Bosch makes it. The two-wheeler business grew 69% last year. Picture a commuter bike weaving through Bengaluru traffic with a Bosch part screwed into its exhaust pipe.

Spark plugs and workshops. Bosch has made spark plugs for over a century. The Naganathapura plant outside Bengaluru started making longer-lasting platinum ones in 2026 and has won export orders. They reach drivers through 50,000+ shops in 650+ districts and 1,500+ workshops, including the Bosch Car Service network, selling everything from filters and wiper blades to batteries.

The blue drill. Bosch power tools are made in Chennai, at a plant where the entire shop floor is run by women. It passed 15 million tools in 2024, and in 2025 it shipped its first angle grinders to Europe. Power tools and fire safety systems make up most of the remaining ~11% of sales.

The diesel scare

In the year to March 2019, Bosch Limited sold ~₹118 billion of products. A year later it was down to ~₹89 billion, a fall of 24%, and it stayed there the following year.

The timing lined up with a perfect storm. India jumped straight to much stricter emission rules in 2020, carmakers walked away from small diesel engines, and then Covid shut the factories. A diesel parts maker looked like it was on its way out. It took until 2023 to get back to its old sales level. Last year it set a record.

Like Cummins, which we covered in edition #29, Bosch Limited has heard plenty of obituaries for diesel. Cummins even runs its own listed Indian subsidiary, a close cousin of this one.

Bracing for the next shift

Bosch Limited isn't betting everything on engines lasting forever. This year it agreed to buy its sister company Bosch Chassis Systems, which makes braking and anti-skid systems, from the wider Bosch group for up to ~$950 million (₹91 billion), paid in cash. Brakes are needed whether a car runs on diesel or a battery.

It has also set up joint ventures with Tata AutoComp to build electric motors and axles for Indian EVs, and with two Indian brake makers for truck air brakes. And earlier this year it showed a hydrogen-powered prototype truck to the visiting German Chancellor, Friedrich Merz, at the Adugodi campus.

The numbers, in plain view

In the first quarter to June 2026, revenue rose 22% to ~$610 million (₹58 billion), driven by passenger cars, tractors and other off-road vehicles. Profit before tax was 16% of revenue.

Last year's reported profit after tax was ~$290 million (₹28 billion), up 38%, but that includes a one-off gain from selling a security cameras business. The underlying growth was ~13%.

The balance sheet has no debt, even after paying cash for Bosch Chassis. The dividend is ₹270 per share, ~29% of profit. And yes, a single share costs ~$470 (₹45,000).

The other side of the ledger

Most of the profit still comes from combustion engines. If electric cars and motorbikes take over faster than Bosch Limited can shift, the core business shrinks. The new ventures are still small.

The parent is in charge. It owns ~71%, buys most of the exports and licenses the technology. Buying a sister company from your own parent requires trust in the price, even with an independent valuation and minority shareholders voting in favour.

Sales follow India's vehicle cycle, and tractor demand follows the monsoon. The shares aren't cheap either, at ~55 times last year's earnings.

Because only ~29% of the shares are freely traded, Bosch Limited carries less weight in the index than its market value suggests. FTSE counts only the shares anyone can actually buy.