Prabhudas Lilladher's research report on Bajaj Electricals
BJE reported comparatively better growth in consumer products segment against peers in the quarter even after muted demand environment and subdued demand in fans amidst high channel inventory on account of transition to BEE norms and unseasonal rains. The growth in CP mainly come from appliances segment (up 16.2% YoY). BJE’s FMEG (CP+Lighting) business has delivered ~15% growth in FY23, outperform the peers on account of market share gain in fans & coolers segment. The appliance business has maintained market share even after muted demand environment. Margin in CP segment has recovery in Q4FY23 as expected and overall margin expected 200-300bps improvement in coming years. It has shown continued balance sheet improvements as it has achieved net cash of Rs4.1bn.
We believe market share gain in fans/cooler business is quite encouraging, and increase in premium product contribution holds good for margin improvement in coming years. We tweak our FY24/FY25 earnings upwards by 0.9%/1.9% and maintain ‘Accumulate’ rating.
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