Bajaj Electricals - Q1FY21 First Cut - ICICI Securities

(CMP: Rs. 427; MCap: Rs. 4865 crore)

Bajaj Electrical's Q1FY21 performance was on expected lines amid pandemic related lockdowns and plans to reduce business from EPC segment. Electrical consumer durable (ECD) business has shown signs of strong recovery in the latter half of Q1FY21, thus delivering a positive segment-level EBIT of Rs. 8 crore. Company generated CFO of Rs. 145 crore as against 42 crore in Q1FY20 and further reduce its outstanding debt by Rs. 152 crore to Rs. 810 crore (as compared to Rs. 962 crore in Q4FY20).

Q1FY21 Earnings Summary

- Revenues came in at ~Rs. 608 crore, down by ~53% YoY during Q1FY20 mainly due to 59% and 50% YoY drop in the revenue of project business and Electrical consumer durable (ECD) business respectively. The fall in revenue was largely attributable to loss of sales for ~30 days in Q1FY21 due to lockdown

- While gross margin remained flat on a YoY basis (up by 350 bps QoQ), the company reported loss at EBITDA level of Rs. ~22 crore. The loss is largely attributable to higher low operating leverage amid absence of sales volume in Q1FY21. Segment wise, EBIT of consumer durable segment stood at Rs. 8 crore (EBIT Margin at 2%), while, company reported EBIT loss of Rs. 44 crore in the project business

- Reduction in debt led to decline in interest cost by 45% YoY Rs. 27 crore during Q1FY21. This coupled with onetime gain of Rs. 28 crore due to demerger of Hind Lamps Limited (associate company) limited the bottomline loss at ~Rs. 17 crore during Q1FY21

We believe, strong ECD distribution networks (over 1.7 lakh touch points), improving segment profitability through change in mix, limited exposure in the project business and debt reduction plans on card are the key monitorables for stocks in the medium to long term. We would revisit our estimates post concall.

Shares of BAJAJ ELECTRICALS LTD. was last trading in BSE at Rs.437.35 as compared to the previous close of Rs. 426.5. The total number of shares traded during the day was 54254 in over 3262 trades.

The stock hit an intraday high of Rs. 442 and intraday low of 419. The net turnover during the day was Rs. 23458944.

Source : Equity Bulls

Keywords