Target: ₹1,190

CMP: ₹

Bajaj Electricals’ sales grew 13 per cent y-o-y to ₹1,480 crore, above our/consensus estimate of ₹1,300 crore each. Consumer products grew 10 per cent y-o-y to ₹1,040 crore led by 64 per cent y-o-y growth in fans (over 50 per cent volume growth) as the company sold non-rated fans prior to BEE norm change.

Margin was impacted by higher aspend y-o-y by ₹14 crore, shifting of logistics back to in-house (₹10 crore cost), redemption of loyalty points and fans’ discounting. Thus, PAT at ₹63.5 crore, up 23 per cent y-o-y, was below our/consensus estimate of ₹70.5 crore each.

The order book is witnessing a rising trend and stood at ₹1,470 crore. . EPC receivables are down to ₹460 crore vs. ₹730 crore .

We cut our EPS estimates by 12 per cent/10 per cent/4 per cent for FY23/24/25E and retain Add rating with a revised SOTP target of ₹1,190 (₹1,245 earlier)..

We expect BJE to post 16%/45% revenue/earnings CAGR over FY22-25E driven by healthy margin expansion in Consumer business and turnaround in EPC. Maintain ADD with SOTP target of Rs1,190 based on P/E of 35x/10x Consumer/EPC on 1HFY25E EPS.