Bajaj Electricals Q3 Results Review - Rural Stress Continues; Expect Gradual Recovery: Systematix

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.Weak consumer sentiment continued to hurt Bajaj Electricals Ltd.’s performance (Q3 revenue down 6% YoY, 4.7% Ebitda margin). Drop in consumer products revenue was led by appliances and fans. Ebitda margin got impacted due to lower sales, higher schemes/discounts (owing to intense competitive intensity) and onetime warranty provision (Rs 230 million). Despite weak results, cash flow was healthy (Rs 1.15 billion in nine months) on working capital (22 days net) optimisation; cash surplus stands at Rs 1.98 billion. On adjusted basis,consumer product’s gross margin improved 100 bps+ on richer product mix and channel efficiency. General Trade (down 7% YoY) witnessed demand slowdown; broad based growth witnessed across key alternate channels. January 2024 was a soft month; management expects gradual recovery only. Lighting revenue (up 1%/6% YoY/QoQ) and Ebit margin (up 273 bps QoQ at 8.4%) came healthy despite continued price erosion in consumer LED. After a weak Q3 and no immediate revival in sight, we have cut FY24E earning by 24% but have maintained it for FY25E/26E. We now expect compound annual growth rate of 6%/24%/33% in revenue/Ebitda/profit after tax over FY23-26E (after a muted 3%/4%/21% CAGR over FY18-23), with Ebitda margin reaching towards 11% and 27%+ return on capital employed in FY26E. Expecting gradual recovery, we maintain 'Buy' on Bajaj Electricals with an unchanged target price of Rs 1,192 (27 times FY26E price/earning)..Click on the attachment to read the full report:.NCLT To Hear Zee-Sony Merger Plea Today.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Bajaj Electricals Q3 Results Review - Rural Stress Continues; Expect Gradual Recovery: Systematix

General trade (down 7% YoY) witnessed demand slowdown; broad based growth witnessed across key alternate channels.

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