Bajaj Electricals Ltd. share price target

Consumer Products Segment Back in The Game.....The consumer durable business was leading from the front by growing at 27.1% YoY with volumes kicking in and growing by 35%. For Q1FY19, the company has achieved sales of Rs. 11399 mn showing a growth of 10.7% YoY.

ICICI Securities Ltd | Retail Equity Research Bajaj Electricals' (BEL) revenues at ~| 1140 crore were up ~12% YoY led by the CD segment revenue growth of ~27% YoY led by ~35% YoY growth (~25% excluding one time GST related impact on base quarter) in volume largely on a low base and a change in product mix. On the other hand, a muted performance in the EPC segment was largely due to slow execution of new projects. The company posted a strong EBITDA margin owing to higher operating leverage...

Bajaj Electricals' (BEL) revenues at ~| 1606 crore, were up ~27% YoY led by the E&P; segment revenue growth of ~44% YoY due to a pick-up in execution of projects. On the other hand, GST adjusted revenue growth in the consumer durable (CD) was at ~15% YoY (vs reported growth of ~6% YoY) led by the same quantum of volume growth. As per the management, GST rollout coupled with completion of range and reach expansion plan (RREP) in FY18, would improve the performance of CD sales (by ~15-20%), going forward....

EPC Segment to be the Next Phase of Growth: The completion of RREP (Rural Reach Expansion Program) model for consumer durables segment has made the segment to grow by 5.5% YoY. The major revenue growth driver was EPC business showing a strong growth of 44.1% YoY.

Modest consumer performance; EPC springs a surprise Bajaj Electricals (BEL)'s adjusted net profit grew 126% YoY in 4QFY18 on the back of EPC (revenue/EBIT grew 44%/110%). On the other hand, Consumer Products revenue grew 15% YoY (like to like basis), in line with JMFe. Aggressive bidding in recent past (after a lull in FY15-17) led to massive new orders in EPC in 4QFY18 (Orderbook of INR 90bn vs INR 31bn in Jan'18), executable over next 18-20 months. The management guides for INR 35-40bn revenue with c.8% EBIT margins in EPC segment while maintained 15% revenue growth and 6-7% EBIT margin guidance in Consumer Products. We continue to remain cautious on the...

Bajaj Electricals' (BEL) engineering, procurement & construction (EPC) division has seen a revival in performance post FY15 supported by new high margin orders. Also, BEL has bagged orders worth | 2389 crore from Purvanchal Vidyut Vitaran Nigam, UP under the Saubhagya Yojana (government's flagship rural electrification programme). This is in addition to BEL's outstanding order book of | 3000 crore (as on Q3FY18) that will be executed in 15 months. Considering the government's thrust on infrastructure development with aggressive allocation to the infrastructure...

Bajaj Continues to Strengthen on RREP Model: BEL has posted a very good set of numbers for Q3FY18 by growing at 8.5% YoY. With the consumer products segment recovery, Bajaj is set to have a turnaroundstory. Approximately 80-85% of supply chain distribution is covered under RREP model. Successful implementation of the RREP is benefitting the growth in volumes of the consumer products.

ICICI Securities Ltd | Retail Equity Research Bajaj Electricals' (BEL) revenues at ~| 1145 crore, were up ~9% YoY led by the E&P; segment. Sales growth (not adjusted with GST) in the E&P; segment was higher at ~17% YoY, supported by a pick-up in execution of projects. However, despite 12% volume growth in Q3FY18 under the consumer durable (CD) category, sales grew at muted rate of ~2% YoY owing to inability of taking price hike. As per the management, GST rollout coupled with completion of range and...

Bajaj Electricals (BEL), a well-known brand in the consumer durable (CD) segment, witnessed a muted performance in the last three years. This was led by various company and macro level developments such as elimination of wholesale chain (through RREP model), demonetisation and implementation of GST. However, we believe a) completion of RREP coupled with implementation of GST (to favour organised players) by Q4FY18 and b) given lower penetration and rising income of the Indian middle class and rural household (owing to good monsoon), would help...

Consumer Business to Lead the Growth: The revenues were flat at Rs.19650 Mn YoY. The consumer segment has fallen by 11.7% and EPC segment has grown by 15.3% in H1FY18. The absolute EBITDA has fallen by 11.5% to reach Rs.900 Mn with EBITDA margins at 4.6% falling over 59bps in H1FY18.