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Nirmal Bang Report
Nirmal Bang has maintained its 'Hold' rating on Bajaj Electricals Ltd. with a revised target price of Rs 397, valuing the company at 23 times Dec‑27E earnings per share, which reflects a ~60% discount to its five‑year historical average multiple.
The brokerage acknowledged the company's continued efforts toward premiumisation, cost optimisation and product mix improvement, but highlighted that these structural initiatives are unlikely to offset near‑ to medium‑term challenges.
According to Nirmal Bang, persistent price erosion in the consumer lighting segment remains a significant drag on growth and margins. Additionally, the company's high exposure to non‑premium categories such as fans continues to weigh on overall profitability, especially in a competitive environment where premiumisation is playing a critical role in industry re‑rating.
The brokerage noted that while long‑term strategic actions are encouraging, the prevailing headwinds call for a measured and cautious stance. Until revenue quality and margin stability show sustained improvement, valuation expansion is likely to remain limited.
Nirmal Bang reiterated that the combination of pricing pressure, slower mix upgrade and exposure to lower‑growth categories justifies the continued discount in valuation, even as the company executes on operational efficiencies.
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