Hold Bajaj Electricals; target of Rs 1,000: ICICI Securities

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26 Aug, 2025 12:21

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ICICI Securitie's research report on Bajaj Electricals

Bajaj Electricals reported revenue growth of 3.8% YoY after seven quarters of revenue decline YoY. However, EBITDA and PAT declined 2.1%, 25.1%, respectively, YoY. Gross margin expanded 174bps YoY led by better product mix and higher realisation, in our view. However, EBITDA margin contracted 40bps YoY as the benefits of gross margin expansion were offset by higher other expenses (+17.2% YoY) led by likely higher brand-building expenses. Higher depreciation and interest cost have weighed on profitability.

Outlook

We model Bajaj Electricals to report revenue and PAT CAGRs of 9.5% and 21.7%, respectively, over FY24-26E. We value the stock as per DCF methodology with TP revised to INR 1,000 (earlier TP: INR 1,050; implied P/E 57x FY26E). We downgrade the stock to HOLD from Add.

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