Bajaj Electricals’ Q1FY19 numbers have been above street expectations on profitability front. Total Sales have increased by 11.7% yoy to Rs1,139.9cr. EBITDA increased by 76.5% yoy to Rs79.8cr during the quarter from Rs45.2cr in Q1FY18. EBITDA margin improved by ~257bps yoy to 7% in Q1FY19. Net profit grew by 97.7% yoy to Rs40.5cr.
• The sales growth is driven by consumer products segment which grew by 27.1% yoy to Rs596.9cr as against Rs469.5cr (volume growth of ~35% yoy) over the corresponding previous quarter. The growth is driven by strong performance in LED products, fans and certain kitchen and domestic appliances.
• The EBIT margin has improved substantially to 7% as against 0.7% in the corresponding previous quarter. This indicates that the company has started reaping benefits of Range and Reach Expansion Programme (RREP) implementation.
• EPC segment reported sales of Rs542.96cr, registering a marginal de-growth of 3% (volume growth of ~5% yoy) over Q1FY18.
• In EPC, costs incurred towards initial set up of infrastructure for new orders received for Power Distribution in Uttar Pradesh, has impacted the margin (in absence of any corresponding revenue against these cost). However, ramp up in execution in the coming quarters is likely to boost sales.
• The current order book of the segment stands at Rs7,657cr, comprising of Rs1,287cr for transmission line towers; Rs6,151cr for power distribution and Rs219cr for illumination projects.
• Strong EBITDA and proportionately lower finance cost and depreciation has led to robust net profits.
Bajaj Electricals Ltd is currently trading at Rs. 626.70, up by 3.65 points or 0.59% from its previous closing of Rs. 623.05 on the BSE.
The scrip opened at Rs. 627 and has touched a high and low of Rs. 646 and Rs. 615 respectively. So far 17,69,392 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 100 DMA.
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