Bajaj Electricals: Prabhudas Lilladher Maintains Buy Recommendation, Targets Rs 384

Bajaj Electricals Sees Decline in Consumer Products Revenue

Bajaj Electricals has reported a decline in its Consumer Products (CP) revenue, which fell by 6.9% year-over-year (YoY) to INR9.3 billion. The decline was primarily attributed to a degrowth in fans, mainly due to weak BLDC performance, and domestic appliances, due to high channel inventory in coolers. However, the company's kitchen appliances segment witnessed strong double-digit growth, partially offsetting the decline in CP revenue.

The company's Lighting business continued to experience healthy momentum, with a 15.6% YoY growth, driven by consumer and professional lighting. This growth was supported by a higher mix of wires and switchgears, along with steady order execution. The Lighting EBIT margin improved due to volume growth and fixed cost control, while the CP margins remained under pressure due to lower scale.

Management Aims to Drive Recovery in CP Segment

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The management aims to drive recovery in the CP segment through improvement across all products and normalization of cooler inventory. Additionally, the company plans to sustain growth momentum in the lighting segment driven by wires.

Outlook and Valuation

We estimate Bajaj Electricals' revenue and EBITDA compound annual growth rates (CAGR) for FY26-28E to be 12.1% and 60.9%, respectively. Based on this, we value the stock at 24 times its March 2028 earnings per share (EPS) and arrive at a revised target price of Rs384 (earlier Rs449). However, due to the increase in commodity prices, we downward revised our FY27/28 earnings estimate by 18.4% and 10.8%, respectively. Consequently, we have downgraded our recommendation to 'Accumulate'.

Revenue Comparison

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