BJE reported soft numbers with sales decline of 1.0% and PAT decline of 4.7% YoY on account of muted demand environment and unseasonal rains (impacting summer products). The scheme of EPC segment’s demerger has been approved by NCLT and accordingly the segment is discontinued. Growth in CP mainly came from appliances segment (up 10.1% YoY) and contraction in margin was due to negative operating leverage and investment in growth, which will drive future growth. BJE is expected to see improvement in business from Q3FY24 with strong festive season and improvement in margin alongside growth, product mix & logistics cost saving. We estimate FY23-25E Revenue/EBITDA/PAT CAGR of 8.9%/16.2%/21.4%, excluding EPC segment. Our current estimates are not comparable to earlier estimates, as we have removed EPC business estimates in our future projection given the business demerger.
OutlookWe value the stock at 37x FY25 EPS (earlier on SOTP, CP business value at 35x) and arrive at TP of Rs1337 (earlier 1326). Maintain ‘Accumulate’ rating.
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