'Add' Bajaj Electricals Shares Maintains PL Capital — Check Target Price

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PL Capital Report

We upward revise our FY26/FY27E earnings estimate by 2.4%/2.6% factoring in lower non-operating cost and reduction in fixed overheads and maintain our ‘Accumulate’ rating.

We recently met the management of Bajaj Electricals Ltd. to gain insights into the consumer products and lighting solutions segments, focusing on channel inventory levels, festive demand outlook, and cost-optimization initiatives aimed at improving plant utilization.

The management highlighted that new product development is expected to contribute ~40% to total revenue by FY26, supported by research and development spends of ~2% of revenue.

Bajaj Electricals is also reviewing its entire SCM strategy including manufacturing, and procurement to optimize associated direct cost and reduce outsourcing.

Due to continued losses at Nirlep factories, the company is planning to restructure this business. Channel filling for the festive season has begun, and with GST 2.0, demand is expected to increase in the coming quarters.

We estimate FY25-27E revenue/Ebitda/PAT CAGR at 9.2%/18.4%/39.7%. We value stock at 35x FY27 EPS and arrive at target price of Rs 664 (earlier Rs 656). Maintain ‘Accumulate’.

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