BJE reported weak numbers with sales decline of 3.5% and PAT decline of 37.2% YoY on account of muted demand environment and margins contraction. Demand sentiment continue to be weak impacting appliances segment while some pickup observed in Oct-23. The contraction in margin was due to negative operating leverage and investment in growth. BJE focused on market share gain with expanding SKUs, investment in brand and premiumisation. We estimate FY23-26E Revenue/EBITDA/PAT CAGR of 9.8%/13.7%/14.6%.
OutlookWe downward revise our FY24/25/FY26E earnings by 21.8%/28.5%/26.2% to factor in slowdown in demand and margin contraction across businesses with higher overhead expenses. We downgrade the stock to ‘Hold’ from Buy with revised TP of Rs1,032, valuing at 37x Sep’25 earnings.
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