ICICI Securities recommended hold rating on Bajaj Electricals with a target price of Rs 419 in its research report dated June 22, 2020.
ICICI Securities research report on Bajaj Electricals
Bajaj Electricals (BJE) reported 0.5 and 12.7% growth in its Consumer Durables (CD) segment while EPC revenues declined 46% and 52% in Q4FY20 and FY20 respectively. This combination has led to deleveraging of the balance sheet which we reckon will continue further in FY21E/FY22E. Management outlook of flat CD revenues and breakeven EPC EBIT in FY21 is a positive surprise leading to increase in our estimates.
We factor a further 50% reduction in debt and 16% CAGR in CD EBIT between FY20E-FY22E. Maintain HOLD with a revised target price of Rs419 (earlier: Rs311).
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