BAJAJELEC - Bajaj Electrical

📊 NSE: BAJAJELEC 🏢 Domestic Appliances 📅 Last Updated: 12/13/2025 18:54

💰 Financial Performance

Revenue Growth by Segment

Revenue growth is expected to be driven by a revival in rural demand and market leadership across multiple large product segments. In Q2 FY26, turnover in summer products was lower than predicted due to seasonal factors, leading to operating deleverage.

Geographic Revenue Split

Not specifically disclosed by region, though the company highlights a significant focus on the Indian market with a specific expectation for growth driven by a revival in rural demand.

Profitability Margins

Gross margins (FLM) are reported to be improving 'handsomely' as of Q2 FY26. However, operating margins declined to 5.6% in FY24 from 7.7% in FY23 due to high discounting and operating deleverage. The company targets a 1.5-2.0% improvement in margins for FY25.

EBITDA Margin

The company aims to sustain an EBITDA margin of 8-10% over the medium term. Current margins are recovering from a low of 5.6% in FY24, supported by price hikes and new product launches.

Capital Expenditure

Planned capital expenditure is estimated at INR 350-400 crore over the medium term, intended to be funded entirely through internal cash accruals.

Credit Rating & Borrowing

The company maintains a 'Stable' outlook with nil long-term debt. Interest coverage ratio was 5.5 times in FY24 and is expected to improve to 6-7 times over the medium term as profitability accretes.

⚙️ Operational Drivers

Raw Materials

Copper and Aluminum are the key raw materials, which, along with other purchases of traded goods, account for approximately 70% of the total cost of goods sold.

Capacity Expansion

The company is focusing on a 100% product portfolio refresh over the next two years, having already completed 40% of the refresh to improve design and technology.

Raw Material Costs

Raw material and traded goods costs represent 70% of revenue. The company is susceptible to high volatility in copper and aluminum prices, which impacts margins if not offset by price hikes.

Manufacturing Efficiency

The company is phasing out old, heavily discounted products in favor of a refreshed portfolio (40% complete) to improve operating leverage and margins.

Logistics & Distribution

The company is actively working on reducing logistics costs as a lever to improve overall profitability margins.

📈 Strategic Growth

Expected Growth Rate

1.5-2.0%

Growth Strategy

Growth will be achieved through a 100% product portfolio refresh, the strategic acquisition of Morphy Richards to operate in the premium segment without royalty leakage, and a focus on rural demand revival.

Products & Services

Consumer electronics and durables including fans, water heaters, room heaters, kitchen appliances, and lighting solutions.

Brand Portfolio

Bajaj, Morphy Richards.

New Products/Services

Refreshed product portfolio (40% complete) featuring better design and technology is expected to contribute to a 1.5-2.0% margin expansion in FY25.

Market Expansion

Focus on maintaining market leadership in large product segments and increasing market share through better product diversity.

Market Share & Ranking

The company holds a leading market position in several consumer electronics and durable categories in India.

Strategic Alliances

The company is part of the Bajaj Group, deriving financial flexibility from entities like Jamnalal Sons Pvt Ltd.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward technology-led product refreshes and premiumization, with Bajaj positioning itself through the Morphy Richards brand and a 100% portfolio refresh.

Competitive Landscape

Intense competition in the consumer durables and lighting sectors necessitates continuous innovation and cost optimization.

Competitive Moat

Moat is built on an established brand position (since 1938), market leadership in key categories, and financial flexibility from being part of the Bajaj Group.