Bajaj Electricals - Q1FY13 Result Update - Kotak

BAEL has reported Q1FY13 results below our estimates due to subdued performance in E&P (Engineering & Project) segment.

- E&P segment reported operating loss in Q1FY13 due to cost over-run in T&D business. FY13 margins would likely remain under pressure for the SBU on account of delay in pick up various T&D projects in India.

- Pick-up in demand for lighting and consumer business in tier ii cities augers well for company's growth. Elongated summer this year has resulted in meaningful growth in 'Fans and Cooler' segment. However adverse currency movement has resulted in margin contraction for the division in Q1FY13.

- We tweak our estimates for FY13 to factor in sluggish margin outlook in E&P business. We change our recommendation to 'ACCUMULATE' (Reduce earlier) on the company's stock with a one year DCF based revised price target of Rs 190 (Rs 200 earlier).

Source : Equity Bulls

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