Prabhudas Lilladher's research report on Bajaj Electricals
Bajaj Electricals (BJE) reported moderate growth of 10.5% YoY in consumer products segment during its seasonally best quarter ,due to a tough demand scenario. Growth in CP mainly came from fan segment (up 63.9% YoY), where company has done channel filling, ahead of BEE rating change. Appliance business has maintained its market share, even after muted demand environment. We expect fan segment to see de-growth of ~5% in Q4FY24, as channel is loaded with non-rated fans. Margin in CP segment is also expected to recover from Q4 to ~8.0-8.5%, as company did one-off expenses related to discounting/promotion spends, advertisement cost and cost related to transition of logistics to in-house in Q3FY23. It showed continued balance sheet improvements, as has achieved net cash of Rs3.8bn. Upgrade to ‘Accumulate’.
Outlook
We revise our FY23/FY24/FY25 earnings estimate by 5.8%/10.5%/11.0% and upgrade to ‘Accumulate’ from ‘Hold’ at SOTP based TP of Rs1,286 (derived P/E of 34x on March’25 EPS, CP business valued at 35x (Rs 1,147 earlier).
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