PL First Cut – Bajaj Electricals Q1FY24

PL First Cut – Bajaj Electricals Q1FY24 – *Praveen Sahay – Research Analyst, Prabhudas Lilladher Pvt Ltd*

Bajaj Electricals Q1FY24 First Cut: Soft performance in challenging environment

CMP: Rs 1,224 | Mcap: Rs 141bn | Accumulate

➡️ Revenue decline by 1.0% YoY to Rs11.1bn, excl. EPC business. (PLe: Rs11.7bn, excl. EPC) Consumer Products/Lighting revenue grew by 2.7%/-12.5% YoY respectively. (PLe: CP segment/Lighting +5.2%/+3%).

➡️ Consumer Products segment reported growth despite demand slowdown and pricing constraints.

➡️ The lighting segment facing demand headwinds, resulted decline in revenue.

➡️ Gross margins expanded by 80bps YoY to 29.5%.

➡️ EBITDA decline by 5.1% YoY to Rs693mn. EBITDA margin contracted by 30bps YoY to 6.2%. (PLe:6.2%) mainly with increase in overhead expenses.

➡️ PBT decline by 3.5% YoY to Rs588mn.

➡️ PAT decline by 4.7% YoY to Rs430mn.

➡️ Consumer Products reported contraction in EBIT margin by 20bps YoY to 5.0%, while Lighting reported expansion in EBIT margin by 10bps YoY to 8.1%.

➡️ The stock currently trades at 40x/32x FY24/FY25 earnings.

➡️ The scheme of demerger of EPC Segment has been approved by the NCLT, Mumbai and accordingly the EPC segment has been shown as discontinued operations.