Hold Bajaj Electricals: target of Rs 760: ICICI Securities

Hold

ICICI Securities's research report on Bajaj Electricals

Bajaj Electricals (BJE) reported a strong revival in consumer products in Q3FY25. There was healthy demand for most of its products despite the 2-4% price hike. It indicates the possibility of strong CY25 for consumer products. However, we believe (1) slowdown in MFI channel (~5% of net sales) and CSD (~9% of net sales) may continue to hurt in coming quarters. (2) Stress in urban markets and impact of inflationary pressures may dampen demand. (3) Continued price erosion in lighting and likely price erosion in B2B lighting may hurt profitability of lighting in FY26. (4) BJE has increased ad-spend as % of net sales. While it is DCF accretive, we model it to impact earnings in near term.

Outlook

We model Bajaj Electricals to report revenue and PAT CAGRs of 8.0% and 14% over FY24-27E. At our DCF-based revised target price of INR 760 (earlier TP: INR 900), implied P/E works out to 43x FY27E EPS. Maintain HOLD.

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