Views on Bajaj Electricals 3QFY2014 results - Angel Broking

Views on Bajaj Electricals Ltd 3QFY2014 results - Angel Broking

"Bajaj Electricals Ltd. (BEL) reported mixed set of numbers for 3QFY2014. Top-line reported growth of 18.4% yoy to Rs. 1,033cr, 5.1% higher than our estimate of Rs. 983cr. The consumer durables (CD), Lighting and luminous (LnL) segment and E&P segment registered growth of 11.6%, 2.9% and 81.6% yoy respectively.

On EBITDA front, BEL reported profit of Rs. 58cr, higher by 60.5% yoy, mainly attributable to dip of 207bp yoy in other expenses. Subsequently, EBITDA margins came in at 5.6% during the quarter, expansion of 146bp yoy. At EBIT levels, both CD and LnL segment reported profit margin of 9.6% and 5.2% respectively vis-à-vis 11.8% and 6.8% in the same quarter previous year. E&P segment, however, reported EBIT loss of Rs. 14cr, 5.1% of the segment revenue as compared to EBIT loss of Rs. 40cr in 3QFY2013. EBIT losses are assumed to be mainly due to unexpected hits from the closure of the older delayed sites.

Subsequently, PAT came in at Rs. 20cr, higher by 71.9% yoy while marginally lower than our estimate of Rs. 21cr. We expect the robust performance of CD and Lnl segment to continue while disappointing performance of E&P segment projects to cease by the end of FY2014. As we rollover to FY2016E, we recommend accumulate rating on the stock with a revised target price of Rs. 238 based on target PE of 14x for FY2016E."

Bajaj Electricals Ltd (CMP: Rs. 210/ TP: Rs. 238/ Upside: 13%)

Source : Equity Bulls

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