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Systematix Research Report
Bajaj Electricals Ltd.'s strong Q3 revenue (up 12% YoY and 21% QoQ) was driven by fans (volume/ value up 50% plus/ 65% YoY) on full liquidation of non-rated inventory.
The impact on Ebitda margin (6.9%) came from greater mix of lower margin nonrated fans and one offs (redemption of loyalty program, discontinuing of tie-up with Mahindra).
While Bajaj Electricals gained market share in fans and coolers, it maintained the same in appliances. Net cash stood at healthy Rs 3.8 billion, as it generated Rs 1.97 billion cash flow from operation in a tough quarter (nine months: Rs 3.75 billion).
The above normal channel inventory in fans could have a bearing on primary sales over the next one-two quarters.
We expect healthy growth in all segments, and estimate revenue/Ebitda/profit after tax compound annual growth rate of 13%/39%/55% over FY22-25E, respectively, to likely post ~10% Ebitda margin, 18%/26% return on equity/return on capital employed and healthy cash flows by FY25E.
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