Consumer appliances firm Bajaj Electricals is now seeing clear signs of growth amidst the coronavirus pandemic as segments like appliances see a pick-up.
In an interaction with Moneycontrol, Anant Purandare, Chief Financial Officer of Bajaj Electricals said based on the current trends, it could be said the worst is over when it comes to coronavirus-led disruption.
"We have posted a good set of numbers, be it the topline, profits or the margins. The EPC business has not seen very high growth because we are taking a calibrated approach in that segment," he added.
Bajaj Electricals was back in black in the September quarter (Q2) and posted a consolidated net profit of Rs 53.11 crore. The company had a net loss of Rs 32.54 crore in the year-ago period.
The total revenue from operations grew 11.1 percent YoY to Rs 1,217.71 crore in Q2FY21 on a consolidated basis.
For the quarter, Consumer Products (CP) segment earned total revenue of Rs 792 crore, which is a YoY growth of 12.9 percent.
Engineering, procurement and construction (EPC) segment had total revenue of Rs 425 crore, showing an 8 percent YoY growth. Here, the company reported a positive EBIT of Rs 7 crore in Q2 as against negative EBIT of Rs 18 crore in the same period last year.
Purandare said the margin expansion in the consumer products segment has been due to the fact that there have been some price increases in the space. He added that the sales demand has picked up across categories.
"With winters coming in, sales for products like room heaters and water heaters will start picking up. Hence, the third-quarter revenues will maintain the growth trajectory," he said.
Bajaj Electricals had earlier taken a decision to go slow on the EPC front. Purandare added that this strategy will continue. The company has an order book of Rs 1,474 crore as of October 2020. He added that they will look to maintain similar levels.
"The cashflows situation is good and borrowing has come down. Currently, the short-term rates have also come down which has helped us reduce the interest cost," he added.
When it comes to fund-raising, Purandare said that if the credit rating is revised for the company then it will be able to go for commercial paper issuances.
In November 2019, rating agency ICRA Limited had downgraded the credit ratings for a few Bajaj Electricals' debt instruments due to a decline in EPC business profits.