See 20-22% revenue growth in FY11: Bajaj Electricals

Bajaj Electricals has announced its results for the quarter ended December 2010. It has reported net profit of Rs 40.6 crore in Q3FY11. Its net sales stood at Rs 689 crore.

In an interview with CNBC-TV18, Shekhar Bajaj, CMD, Bajaj Electricals, speaks about the results and gives his outlook going forward. Below is a verbatim transcript of his interview with CNBC-TV18's Latha Venkatesh and Gautam Broker. Also watch the accompanying video. Q: Could you take us through your sales and profit performance as well as more importantly your margin performance? A: I am happy to inform you that for the third quarter we have grown by 18.7% and the profit is up by 19.1%. The profit before tax has gone up from Rs 50 crore to Rs 59 crore. The profit after tax has gone up from Rs 34 crore to level of Rs 40 crore. If we look at our different businesses, for the first half year, incase of lighting, we were at an earnings before interest, taxes, depreciation and amortization (EBITDA) margin of about 3.4% which is now upto 4.4%. Incase of consumer durables, it was about 10.5% which is now upto 13%. Even in the engineering project, which was having a lot of problem, especially in the second quarter the margins were hardly 3% and for the half yearly, it was 6.1% has gone upto 9.4%. However, there is pressure on the commodity prices and therefore margins. Because of the interest saving and other cost controls, we have been able to see that up. Q: What would explain this fall in profit year-on-year from Rs 50 crore to Rs 40 crore? A: Where is the quarter-to-quarter fall? Every quarter the profits have gone up. If you look at it, for the first half year, our total profit was for the total half year was Rs 70 crore and this year it is Rs 59 crore for one quarter, so it has gone up. There is no fall year to year. Also, if you look at it, the third quarter is always a very strong quarter. So, normally the third quarter is almost equal to the first two quarter profit and the fourth quarter is clearly the best quarter for the company which is almost equal to the total profit of the first three quarters. So, with the result, there is no fall in any of the quarters, except second quarter we had fallen by 20% over the previous second quarter that is the only fall in the last 29 quarters that we have been talking about. So, this quarter again we have grown by 19%. Q: If you can speak a bit more about your engineering division, what kind of an orderbook you enjoy there and what is the timeframe for completion of the orders? A: The order book is about Rs 1,051 crore. Of that, we are expecting that most of the order should be completed in the next 18 months. So, most of the orders will be completed in the next financial year that is 2011-2012.
The margins are going to be under pressure as far as engineering projects are concerned. I do not expect that against the 11% which had been reached the previous year, and we have reached 9.4%, I do not think that we will come to last year