Bajaj Electricals reports subdued performance in Q3BAJAJELEC - 1070 Change: -21.85 (-2.00 %)
News:Bajaj Electrical's Q3 revenues declined 12% YoY to Rs.1320 crore, mainly due to the high base of last year and slow order execution in the engineering division. Consumer products and engineering segment revenues declined 6% and 31% YoY to Rs.1080 crore and Rs.240 crore, respectively. EBITDA margin declined 290 bps YoY to 7% mainly due to sharp rise in raw material cost. Finally, PAT declined 51% YoY to Rs.48 crore
Views: Bajaj Electrical's Q3 performance was below our estimates mainly due to lower volume offtake in the consumer product category amid fear of spordic lockdown and strong base of last year. On the margin front, the management has guided for further price hike in the coming months to offset higher raw material prices. For the long term, management targets 1% increase in EBITDA margin every year in the consumer product category through launch of premium products and improved operating leverage. The board has also decided to de-merge its engineering business which will help focus on streamlining the consumer product business, going forward.