Bajaj Electricals (500031) Q1 24/25 earnings summary

Executive summary

• Revenue from operations for Q1 FY25 grew 3.8% year-over-year to INR 1,155 Cr, led by strong performance in fans and professional lighting, despite soft demand in kitchen appliances.

• Sequential profitability improved, but PAT for continuing operations declined 25.1% year-over-year to INR 28 Cr due to higher expenses and investments.

• Consumer Products returned to revenue growth after four quarters, with double-digit growth in most sub-segments and strong performance from Morphy Richards.

• Operational cash flow for Q1 was INR 155 Cr, with cash, cash equivalents, and surplus investments totaling INR 442 Cr as of June 30, 2024.

• The demerger of the project business and leadership transitions, including a new COO and MD resignation, enhanced focus and market capitalization.

Financial highlights

• Revenue from operations rose to INR 1,155 Cr, up 3.8% year-over-year; gross margin improved by 1.5 percentage points to 31.1%.

• PAT for continuing operations declined to INR 28 Cr, with EBIT margin at 4.7% and PAT margin at 2.4%.

• Consumer Products revenue grew 3.7% year-over-year, reversing a four-quarter decline.

• Lighting Solutions segment revenue increased 4.3% year-over-year, with EBIT margin improving to 10.5%.

• Cash from operations in Q1 was INR 155 Cr; cash and surplus investments increased to INR 442 Cr.

Outlook and guidance

• Management expects a strong second half for Consumer Products, driven by rural demand recovery, monsoon, and government interventions.

• Kitchen appliances are expected to return to growth in H2 FY25, supported by rural rebound and festive season.

• Margin expansion is anticipated as operational improvements, logistics efficiencies, and pricing actions take effect.

• Focus remains on premiumization, product innovation, and channel expansion.

• R&D and NPD investments are expected to taper off, with pricing power and margin benefits emerging from FY26.