Buy Bajaj Electricals - Motilal Oswal

Bajaj Electricals Ltd (BJE.IN; Mkt Cap USD446m, CMP Rs208, Buy)

INVESTMENT ARGUMENTS:

Leadership position in consumer facing businesses -BEL is among the top 2 players in all consumer facing businesses and has delivered CAGR growth of more than 25% in each of them for the last 5 years.

Margins to stabilize in Engineering and Projects business - The margin in E&P business to stabilize at ~9% in medium to long term.

Strong Sales and Earnings Growth - We expect a CAGR growth of 24%/23% in Sales/PAT during FY10-12E aided by similar growth in all reported segments.Our estimates are lower than the mean consensus EPS estimates for FY11E/FY12E by 15%/10%.

Recommend BUY with a 15 month price target of Rs 330 - 18x FY12E.

Source : Equity Bulls

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