Hold Bajaj Electricals; target of Rs 281: Prabhudas Lilladher

Moneycontrol • 3 days ago

Original source

Key Investment Pillars

  • Consumer Products revenue grew by 2.4% YoY, driven by double-digit growth in kitchen appliances, water heaters, and steam irons, while fans declined by more than double digits.
  • Lighting Solutions revenue declined by 1.3% YoY, impacted by adverse product mix and operating deleverage.
  • Management aims to absorb more than half of input cost inflation through productivity improvements, with pricing actions implemented in lighting and further hikes under evaluation in consumer products.
  • Alternate channels grew 7.0% YoY, with double-digit growth in e-commerce and high double-digit growth in exports, while general trade declined 3% YoY.

Thesis Validation Checklist

  • Watch for market share recovery in fans, supported by product innovation and capacity expansion.
  • Monitor the growth of BLDC fans, which now account for ~17% of the Fans portfolio.
  • Track the improvement in profitability, with a focus on achieving double-digit revenue growth ahead of the market.
  • Observe the impact of pricing actions and productivity improvements on margins.
  • Keep an eye on the growth of new businesses, which contributed ~20-25% of the Lighting segment.