The company had a 70 percent YoY increase in gross sales in Q2
Bajaj Electricals posted a 79.5 percent year-on-year (YoY) rise in its September quarter net profit at Rs 34.08 crore on a 70 percent YoY increase in gross sales.
Gross sales of the electrical goods company rose to Rs 1,583.3 crore in the quarter. Of this, consumer products revenue grew 25 percent YoY to Rs 642.2 crore.
The Engineering, Procurement and Construction (EPC) segment revenue grew 127 percent to Rs 955.90 crore. The company said the execution of projects in Uttar Pradesh is on the fast track and would boost the segment's revenue segment in the coming quarters.
Shekhar Bajaj, Chairman and Managing Director, Bajaj Electricals said "Consumer Products segment has registered a strong growth in top line, driven by increased market penetration through its retail network, which has been possible on account of successful implementation of its Range and Reach Expansion Programme' (RREP).”
However, Bajaj said the increase in commodity prices and depreciation of the rupee has impacted the margins of this segment. With festive season ahead, the demand for consumer products is expected to remain strong during the year.
The company has already raised prices for certain products categories during the current quarter which has been accepted by the market. It has also started marketing and distribution of non-stick cookware under 'Nirlep' brand through its distribution channel, which has received a very good response.
In the EPC space, the current order book stands at Rs 7,307 crore, comprising Rs 1,278 crore for transmission line towers, Rs 5,813 crore for power distribution; and Rs 216 crore for illumination projects.
Bajaj Electricals said they have acquired 80 percent of the equity shares of Nirlep for Rs 30.77 crore. Accordingly, Nirlep has become a subsidiary of the company. Bajaj Electricals has a call option to acquire the remaining 20 percent shares as per the terms of the share purchase agreement.
Further, the board has approved to give a corporate guarantee to the lenders of Starlite Lighting (SLL), a joint venture of the company, in respect of SLL's proposed issue of non-convertible debentures of Rs 60 crore. With this, the total amount of corporate guarantees given by the company on behalf of SLL stands at Rs 242 crore.
New board members take charge
Bajaj Electricals board has also announced a set of new management members, in an attempt to strengthen the management after the sudden demise of the then Managing Director Anant Bajaj in August.
The new members include Anuj Poddar as an additional director and whole time director with the designation of executive director for a period of five years with effect from November 1. Further, Munish Khetrapal will be appointed as Additional Director in the category of non-executive independent director for a term of five years with effect from November 1.
Also, Pooja Bajaj, spouse of late Anant Bajaj, is proposed to be appointed as additional director after his demise due to a cardiac arrest.All the appointments are subject to shareholder approval in the company's 2019 annual general meeting.
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