Bajaj Electricals - SELL - TP Rs.335 - Result Update - Kotak

- BAEL reported Q2FY18 result below our estimates due to margin contraction in the E&P division. Profitability in consumer segment remained sedate vis-à-vis peer group due to volumes affected by RREP rollout.

- At 17.8 x FY19 PER, BAEL stock is trading at a significant discount to the peer group (key players like Havells and Crompton Greaves consumer trading at PER of over 30x FY19 earnings) due to 1) company's presence in EPC business (B2B) which attract lower valuation, 2) sub-par margins vis-à-vis competitors in the consumer durable business and 3) prolonged history of earnings disappointment.

- We maintain 'SELL' rating with SOTP based unchanged target price of Rs 335 on company's stock

Shares of BAJAJ ELECTRICALS LTD. was last trading in BSE at Rs.403.75 as compared to the previous close of Rs. 412.4. The total number of shares traded during the day was 27020 in over 806 trades.

The stock hit an intraday high of Rs. 416.6 and intraday low of 394.95. The net turnover during the day was Rs. 10919300.

Source : Equity Bulls

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