Bajaj Elec expects15-20% growth in consumer durables biz

Shekhar Bajaj, chairman & managing director, Bajaj Electricals, says that the company has seen a positive growth in consumer durable and lighting segment. Compared to last year, this year or EBITDA may be slightly higher. 

Below is the edited transcription of his interview to CNBC-TV18.

Q: TTK Prestige reported a weak set of numbers and point out slight consumer slowdown. Are you seeing the same trend or they could have handled the situation better in terms of comparativeness are you better positioned?

A: TTK Prestige has not done that badly as the market has reacted. There may be slight slowdown. It is more of a correction as the prices had gone up so high. We have seen a positive growth in consumer durable and lighting segment. Compared to last year, this year or EBITDA may be slightly higher. 

Q: Can you take us through your lighting, consumer durables and engineering segments? The level of demand slowdown or lack of it would be different in different segments. Can you throw light on this front?

A: Lighting and consumer durable both come under similar category where the level of growth is 15-20 percent. However, the margins are bit dented by a percent mark. EBITDA should be same as reported last year.

Under engineering projects many projects has to be cleared up which have been pending. In the beginning of April 2011, we had 24 old sites and we like to bring it down to six sites by 31st March 2013. The closure cost is more while closing the site so in the second quarter or even third quarter, sales will be hit. Sales are also down and the bottom-line is substantially down.

Q: How do you see volume growth? Some analysts and the sell side brokerages suggest that there is a decline in demand by 5-10 percent for consumer goods in markets like Chennai, Mumbai and Bangalore? Are you witnessing the same trend in your dealerships?

A: We are not a strong player in Southern market. The demand for fans and mixer have been hit in the Chennai market because around 25 lakh mixer and fans has been given free to people falling in below poverty line under Jayalalitha scheme. This is also having a psychological impact on items like pressure cooker and others.

Our overall growth is not badly impacted. In the E&P space we will continue to take beating for another quarter. We are expecting new orders at good prices, so going ahead in the first quarter and clearly next year, E&P will again be good. E&P has not been good in the last six quarters and is impacting the overall sentiment for Bajaj Electricals.