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Research
Bajaj Electricals Ltd - 4QFY2013 Result Review - Angel Broking
Posted On : 2013-05-27 21:31:18( TIMEZONE : IST )
Bajaj Electricals Ltd. (BEL) reported poor set of numbers for 4QFY2013. Top-line reported flat growth of 5.1% yoy to Rs. 1,114cr. The consumer durables (CD) and Lighting and luminous (LnL) segment registered growth of 22.4% and 14.9% yoy respectively while E&P segment dip by 22.5%. EBITDA stood at Rs. 15cr which was lower by 84.7% yoy while margins at 1.2% lower by 694bp owing to higher raw material cost. At EBIT levels, both CD and LnL segment reported margin of 8.0% and 7.9% respectively vis-Ã -vis 10.6% and 11.3% in the same quarter previous year. Lower EBIT margin is attributable to the inventory correction on account of new inventory policies of the company. E&P segment, however, reported EBIT loss of Rs. 51cr, 17.8% of the segment revenue, mainly due to unexpected hits from the closure of the older delayed sites.
On annual front, top-line grew by 9.3% to Rs. 3,388cr contributed mainly by CD segment (54.2%), followed by LnL (25.4%) and E&P (20.3%). EBITDA came in at Rs. 110cr, lower by 53.4%, while margins at 3.3% lower by 440bp owing to 517bp higher raw material cost. On the back of sluggish top-line growth and poor operating performance, net profit dip by 56.9% to Rs. 51cr.
Amidst poor performance for the quarter, BEL is set to start the FY2014 with a clean slate after the stock correction and significant hit from the cost over-run of E&P's delayed projects closure. In addition, BEL has initiated its entry into premium segment of CD market with new launches slated to hit the market. On the back of recent developments, we expect the top-line and bottom line to grow at CAGR of 14.9% and 96.7% (due to low base) respectively over FY2013-15E. We recommend Buy rating on the stock with target price of Rs. 237 based on target PE of 12x for FY2015E.
