Expect Rs 5000 cr of revenues in FY16: Bajaj Electricals

Bajaj Electricals posted a 9.6 percent rise in income from operations up to Rs 1128 for the quarter ended September this year. Speaking to CNBC-TV18, Shekhar Bajaj, CMD, Bajaj Electricals says he expects revenue of Rs 5,000 crore in FY16 on the back of substantial growth in EPC segment in the second half.Furthermore, he is of the view that the company’s margins in lighting and engineering and products business will improve going forward.However, he credits under recovery of fixed charges to have led the bottomline de growth in consumer durables for the second quarter.Below is the verbatim transcript of Shekhar Bajaj’s interview with Nigel D’Souza on CNBC-TV18.Q: Going through your numbers, the big miss really has come in, in your consumer durables (CD) business. Can the second half of the year be better? We have seen a contraction in revenue there; even the profitability has taken a sharp knock.  A: When you have a topline de-growth, the fixed cost gets divided over a smaller volume and therefore the consumer durable has taken a major hit in terms of their bottomline. However, already October we have shown positive numbers as far as topline is concerned and therefore in the second half we can clearly see some positive growth coming in. Therefore, for the year at least, we hope that we will be overall compared to last year, we should be positive. As far as consumer durables is concerned, there should be some nominal growth coming out for the year. As far as the other two businesses are concerned, they are doing extremely well. Q: Sustainability of the other two businesses, they have done well in the last quarter, both your lighting and your engineering and products business, is it sustainable, this kind of a strong performance? A: As far as margins are concerned, yes both of them. On the other hand, the project business, second quarter is normally a relatively weak quarter because of the monsoons. So, the project work gets slowed down. Now, the next two quarters, because we have sufficient orders in hand and therefore because of that, the turnover will substantially increase in the next two quarters. Similarly, in case of the lighting business also, the next two quarters are supposed to be good because of the season time and therefore I think the margins are sustainable. The growth in lighting may not continue to be around 18-19 percent but clearly a double digit is definitely there, there is nothing stopping that. Engineering, procurement and construction (EPC) continues to grow by 25-30 percent; should continue in the next two quarters also and CD should become positive. In terms of second half, we should have positive growth and we are looking at having a turnover of about Rs 5,000 crore for the year.