We cut our FY23/24 EPS by 8%/4% given margin pressures due to RM inflation and rising competition. However, BJE continues to impress with persistent improvement in balance sheet led by its net debt free status now. We believe market share gain in fans business is quite encouraging amid weak rural demand, thanks to new product introductions. We believe BJE has potential to scale up its new product categories through continuous distribution expansion. EPC business will break even from here on, as guided earlier. We remain structurally positive on longer term prospects given 1) strong brand with leadership position in kitchen appliances 2) increasing shelf space by leveraging industry leading distribution network & brand strength and 3) improving balance sheet aided by robust cash flow generation.
OutlookWe estimate Sales/PAT to grow at 15%/49% CAGR over FY22-24E and value the stock on SOTP based TP of Rs1,091 (derived P/E of 34x on March’24 EPS, Consumer business valued at 35x).
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