Hold Bajaj Electricals; target of Rs 941: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on Bajaj Electricals with a target price of Rs 941 in its research report dated May 15, 2024.

Broker Research

May 16, 2024 / 12:45 IST

hold

Prabhudas Lilladher's research report on Bajaj Electricals

We downward revise Bajaj Electrical (BJE) FY25/26E earnings by 14.5%/5.6% to factor weak consumer demand and soft margin profile. BJE reported weak numbers with sales decline of 8.0% and PAT decline of 43.5% YoY due to sluggish demand in rural & non-premium market, weakness in appliances segment and demand slowdown in GT vertical along with margins contracts due to discounting and operating de-leverage. Decline in CP revenue was from appliances while fans grew by single digit. Lighting segment reported flat YoY volume in CL with LED price erosion and PL were flat revenue, while margin improved on account of gross margin improvements. BJE indicated that April-24 saw double digit growth in CP segments and has taken price hike as well. BJE anticipates a business boost due to increased consumer demand sentiment in rural and semi-urban areas following a favorable monsoon season.

Outlook

We estimate FY23-25E Revenue/EBITDA/ PAT CAGR of 7.0%/19.2%/28.6%. We value the stock at 37x FY26 EPS and arrive at revised TP of Rs941 (earlier Rs 997). Maintain ‘HOLD’ rating.

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