The overall economy may be in a slowdown, Bajaj Electricals still feels it will be able to achieve its earlier revenue guidance of Rs 3,800 crore this year, helped by strong growth in consumer durablĂ©s and lighting.
"Demand is quite good...Consumer durables whether its Bajaj appliances or Morphy Richards will grow clearly 20-25%, there is no doubt of it," Shekhar Bajaj, chairman & MD told moneycontrol.com.
He also sees a 20% growth in lighting, especially CFLs and LED lights and 15% growth in luminaires.
Earlier on Thursday, Bajaj Electricals reported a 9% growth in first quarter net profit at Rs 12 crore. Net sales rose 22% to Rs 666 crore.
The strong growth was led by consumer durables, which grew 29% to Rs 390 crore and lighting segment revenue was up 20% to Rs 152 crore.
But that strong growth was offset by pressure on margins and continued sluggishness in the engineering and projects business.
Both segments saw a sequential drop in profit.
"Market conditions such as commodity prices volatility, exchange rate fluctuations etc have pushed up the purchase price of the products and have therefore impacted margins of consumer durables and lighting," Bajaj said.
The company is taking price hikes to offset the pressures and Bajaj expects margins will be back on track by the Diwali festive season.
"We raised prices last quarter. Every quarter we are raising it. We used to increase once a year, then we made it twice a year. Now we do it when ever required," Bajaj said.
He is also not worried by poor monsoon rains. There may be some downtrading, but demand in rural areas will remain strong due to low penetration, he feels.
Bajaj has plans to open over 70 Bajaj World retail outlets this year, of which 50 will be in small towns.
The market conditions for the E&P segment remain tough with overall slow pace of infra sector growth, Bajaj Electricals said.
Segment revenue rose 8% to Rs 123 crore in April-June while loss remained around Rs 7 crore.
The company is now restructuring its order book, closing long delayed orders and sharply focussing on profitbility for new orders.
"As far as E&P is concerned, last year we were busy cleaning up the old orders. We had 24 sites for transmission line towers (TLT). We are hoping by March 2013 out of 24, 18 would have been closed and we will have only 6 sites left of old ones," he said.
That apart, 3-4 new sites may be added this year.
EBITDA for the full year is likely to be around Rs 40-50 crore, up from Rs 26 crore last year, according to Bajaj.
Bajaj Electricals currently has order book of Rs 450 crore, comprising of Rs 133 crore of TLT, Rs 64 crore of high mast and poles and Rs 253 crore of special projects.
The company has also bid for several new orders. Bajaj hopes its order book will touch Rs 800 crore by September-end.
The share closed at Rs 172.80, down Rs 9.50, or 5.21%.