Bajaj Electricals - Q4FY21 First Cut - ICICI Direct

(CMP: Rs. 1132; MCap: Rs. 12973 crore)

Bajaj Electricals performance in Q4FY21 was lower than our estimate mainly due to sharp fall in the revenue of Engineering & Project business. However, company's ECD division performance remained healthy and company managed to reduce debt by 52% YoY to Rs. 471 crore in FY21 through improved cashflow from operations.

Q4FY21 Earnings Summary

- Revenues came in at ~Rs. 1259 crore, down by 3% YoY in Q4FY21 (vs. I-direct estimate of Rs. 1439 crore) mainly due to 49% YoY dip in the revenue of Engineering & Project (E&P) division to Rs. 283 crore (Vs I-direct estimate: Rs. 516 crore). The ECD segment performance remain healthy with revenue growth of 31% YoY to Rs. 975 crore (vs. I-direct estimate Rs. 923 crore)

- The EBITDA margin increased by 290 bps YoY to 5.8%, however lower than our estimate of 8%. The lower than expected EBITDA margin was mainly due to losses in the Project division. The company incurred EBIT loss of Rs. 8 crore in the project business (Vs losses of Rs. 23 crore in Q4FY20). However, EBIT of consumer durable segment increased by 67% YoY at Rs. 85 crore (EBIT Margin at 8.7% Vs 6.8% in Q4FY20)

- Reduction in debt led to decline in interest cost by 70% YoY Rs. 10.8 crore during Q4FY21. This coupled with recovery in EBITDA margin helped drive PAT which came in at Rs. 57 crore (I-direct estimate: ~Rs. 80 crore) Vs net loss of Rs. 1 crore in Q4FY20

We believe, strong ECD distribution networks, 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.1128.4 as compared to the previous close of Rs. 1138.4. The total number of shares traded during the day was 71258 in over 5949 trades.

The stock hit an intraday high of Rs. 1178 and intraday low of 1111.1. The net turnover during the day was Rs. 81596973.

Source : Equity Bulls

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