Bajaj Electricals Ltd Management Discussions

Global Economic Economy

In CY 2026, the global economy sustained a stable growth trajectory of 3.4%, navigating trade frictions and policy ambiguity with notable resilience. This performance brings the adaptability of major economies to the fore. Accommodative financial conditions and fiscal & monetary policy support facilitated expansion. Advanced economies recorded a growth of 1.9%. The US exhibited steady growth, attributable to strong domestic demand and sustained investments in advanced technologies. Growth moderated across the Eurozone due to subdued industrial activity and weaker external demand. In contrast, emerging economies expanded by 4.4%. This was driven by strong export performance and steady trade across several Asian economies.

Further, inflation moderated to around 4.1% during the year, supported by stable exchange rates and slower nominal wage growth2. Goods price inflation increased modestly in advanced economies, particularly in the United States, due to higher tariffs. In contrast, it declined in many EMDEs following reduced demand for tradable goods after earlier stock-building.

Global monetary policy continued to ease as cross-border capital flows remained strong, and a weaker US dollar gave central banks more room to adjust policies. Further, tariff-related trade frictions prompted a gradual reconfiguration of global supply chains towards countries with preferential trade agreements. In aggregate, global economies exhibited notable agility amid a turbulent external landscape. However, the Middle East conflict poses risks to commodity markets, inflation expectations, and financial conditions.

The global economic outlook remains influenced by high macroeconomic uncertainty, shifting trade policies, and continuing fiscal challenges. Geopolitical tensions in the Middle East further add to these pressures, increasing the fragility of the global economy. Disruptions in key shipping routes may lead to higher freight costs and longer lead times. Additionally, volatility in crude oil and base metal prices, such as copper and aluminium, may result in higher input costs. However, reduced tariff rates along with ongoing fiscal and monetary support may sustain growth momentum, with GDP projected at 3.1% in CY 2026. This is expected to result in a slight rise in inflation, with projections at 4.4% in CY 2026. However, inflation is expected to decline to 3.7% in CY 2027, reflecting easing labour market conditions in several economies and subdued demand for tradable goods3.

Indias Economic Overview4

Despite global uncertainty, Indias economy maintains strong momentumwithasteadygrowthrateof7.7%*.Robustconsumption and heightened investment activity positioned India as the fastest-growing major economy for the fourth consecutive year. Inflation stayed well below the Reserve Bank of Indias (RBI) target band, at around 3.4 %5. Falling food prices primarily drove this decline. The price moderation reflects improved real purchasing power and supported consumption. As price pressures declined, monetary support was provided through a total reduction of 125 basis points in the policy repo rate.

Policy interventions during the year, including the rationalisation of GST rates and lower-income tax rates, helped simplify taxation, enhance consumer affordability, and support strong demand across both urban and rural markets. Complementing this, the government allocated approximately 11.21 lakh crore towards CAPEX in FY 2026 to advance infrastructure across crucial sectors6. Industrial activity continued to register robust growth, while the services sector demonstrated resilience. This was driven by strong growth in manufacturing and electricity production. Notable contributors include electronic products and use-based categories, such as consumer durables and infrastructure goods. Indias merchandise imports grew faster than merchandise exports, resulting in a widening of the trade deficit. Gross FDI inflows remained robust, primarily benefiting the manufacturing and energy sectors. By year-end, the rupee hit an all-time low of approximately 95/USD, driven by Middle East conflict volatility and FPI outflows. Despite this, the INR remained one of the least volatile emerging market currencies, supported by a modest current account deficit and strong forex reserves. A weakening rupee accelerates domestic inflation by driving up import costs (especially crude oil) and widens the trade deficit, though it provides a competitive boost to Indian exporters.

Tariff-related trade disruptions and volatility in capital flows may intermittently affect exports and investor sentiment. However, strong capacity utilisation, improving credit growth and continued government focus on capital expenditure are expected to support investment activity, with GDP growth rate projected at 6.9% for FY 2026-27.

However, supply-chain disruptions due to the West Asia conflict could tighten the availability of key inputs for downstream sectors, including plastics and aluminium. Despite these challenges, CPI inflation for 2026-27 is projected at 4.6%, supported by favourable supply-side conditions including adequate reservoir levels, comfortable foodgrain buffer stocks, and the continued benefits of GST rate rationalisation. To support consumer demand in this environment, the MPC has reduced the repo rate to 5.25% and maintained its neutral stance.

On the external front, export momentum is expected to strengthen, supported by advancing bilateral trade negotiations with the United States. Additionally, the recently concluded Free Trade Agreement (FTA) with the European Union is expected to improve Indias trade balance by around 1.44 lakh crore through higher exports and deeper market integration, creating wider trade opportunities for Indian manufacturers.9 These agreements are expected to support domestic exporters amid global uncertainty, with benefits unfolding over time.

Further, the Union Budget for FY 2026-2027 has bolstered this growth outlook by raising CAPEX to 12.2 lakh crore.10 This is expected to strengthen the long-term investment capacity across consumer durables, electronic components and energy-linked sectors. Overall, the countrys macroeconomic fundamentals and policy direction provide a strong foundation for sustained growth in the year ahead.

Appliances

Indias consumer appliance sector is expanding, buoyed by urban expansion, higher disposable incomes, and a growing preference for smart, energy-efficient products. Middle-income households are now making more considered choices, balancing affordability with smarter, power-saving features. Notably, the demand has progressively moved beyond metro cities. The Tier II and Tier III cities accelerated e-commerce growth, showing strong adoption and notable sales performance. This can be attributed to a gradual shift towards premium offerings, even among cost-conscious consumers. Further, the wider adoption of omnichannel sales and service models continues to strengthen market access and customer engagement of brands. On the supply side, the industry is driven by government-led manufacturing initiatives such as the PLI Scheme for white goods. A sharp increase in allocation in the Union Budget FY 2026–27 is expected to support capacity augmentation, local manufacturing and encourage new entrants.

Looking ahead, the consumer durable sector is projected to grow at a 11% CAGR in FY 2027, supported by rising consumption, broader rural reach and growing global investment interest. Further, the white goods market continues to gain momentum, with projections reaching 1586 trillion by 20307. The greater convenience offered by online platforms such as Q-commerce is expected to support growth in the segment. Stricter BEE energy efficiency and star-labelling norms are set to elevate product standards and augment the adoption of energy-efficient appliances.

Fans

The Indian fan industry represents a vital segment of the home appliances market. A transition from conventional offerings to energy-efficient and premium models has been a notable trend. This shift is largely being propelled by tighter efficiency standards, growing adoption of BLDC (Brushless Direct Current) motors, smart control features and a shift in design sensibilities.

The market is significantly driven by the growth of both organized retail and e-commerce channels.

Increasing urbanisation drives demand through the rapid expansion of housing construction and high-rise developments.

Indias tropical climate and forecasts of El Ni?o-led summers with above-normal temperatures intensify the demand for fans as essential cooling appliances.

Rising disposable income leads to higher spending on fans as essential home appliances, driving market expansion. The wider electrification of rural towns turns fans into a first-time purchase for millions of households, making rural India a primary market for expanding fan sales.

Increasing focus on interior aesthetics is prompting consumers to select designer fans with premium finishes and customizable options to complement home decor. Integrated LED ceiling fans are gaining popularity as dual-purpose appliances that provide both lighting and cooling, making them ideal for compact urban apartments.

High-speed fans with anti-dust technology are becoming standard as specialized coatings reduce dust accumulation by 50%, ensuring easier maintenance and cleaner air.

Professional Lighting

The professional lighting market is gaining strong traction as urban centres and infrastructure grow and lighting systems become smarter and more efficient. Cities today demand solutions that go beyond illumination. This shift is driving the adoption of advanced professional lighting solutions across public spaces, commercial developments and outdoor installations. The market is expected to grow from $354.33 million in 2025 to $391.61 million in 2026 and is projected to reach $645.62 million by 2031, at a CAGR of 10.52% over 2026–203113. Technological advancements and the growing demand for energy-efficient solutions are key drivers propelling market growth. At the same time, sustainable lighting is gaining importance due to environmental concerns and regulatory requirements.

Government initiatives, such as urban infrastructure spending under the Smart Cities Mission and energy-efficiency building codes, are supporting demand and lowering long-term ownership costs. However, market growth remains constrained by the high upfront cost of professional lighting solutions. Overall, demand for professional lighting is expected to remain resilient in the years ahead as technology advances and urbanization accelerates.

Consumer Lighting

Indias consumer lighting sector is gaining momentum as homes and businesses swap traditional fixtures for energy-saving alternatives. The market is influenced by rising adoption of smart lighting and a growing focus on health and well-being, shaping product development and customer expectations. With a strong focus on residential and smart-home adoption, the market is quickly shifting towards integrated, connected and aesthetic lighting solutions. LEDs continue to dominate the consumer lighting market, while smart lighting is gaining prominence for its automation, remote control and optimised energy utilisation. Wider IoT integration further supports this trend by enabling seamless connectivity with other smart home systems. Beyond technological progress, policy support continues to be a crucial driver of momentum. Government procurement programmes, such as UJALA, continue to promote large-scale adoption of energy-efficient lighting across urban and rural areas. Concurrently, Production Linked Incentive (PLI) schemes are further anchoring supply-chain resilience and lowering import exposure. These developments are playing a crucial role in encouraging consumers to switch from conventional to modern lighting solutions.

to create a better planet and a better life for all. The foundations primary focus lies in environmental sustainability, particularly through its Green India projects.

Consumer Products

The consumer products business of Bajaj Electrical Limited addresses a wide spectrum of household needs through an extensive portfolio of fans, kitchen, home appliances and lifestyle products like grooming. These products are designed to cater to the dynamic preferences of todays consumers. Its multi-brand strategy integrates functionality, energy efficiency and cutting-edge designs to ensure reliability and differentiation across affordability bands. The Company places consistent emphasis on enhancing product performance and consumer experience. Bajaj Electricals sustained focus on innovation, product upgradation and adoption of energy-efficient technologies continues to guide its endeavours.

The Company follows a structured multi-brand, or ‘house of brands, approach, wherein each brand, such as Bajaj, Nirlep and Morphy Richards, is anchored in a distinct value proposition. The strategy supports steady growth by establishing a culture of continuous progress and market relevance. The portfolio became more resilient, with lower reliance on seasonal categories and higher contribution from core and emerging segments. The Company remained focused on premiumisation through targeted product launches and upgrades to its product portfolio.

Bajaj

Contemporary consumers are increasingly defined by fast-paced, aspiration-led lifestyles, where convenience, reliability and longevity dictate purchase decisions. Home appliances are expected to blend seamlessly into daily routines while offering reliable performance, ease of use and durability. In response, Bajaj continues to deliver products that align with its promise of durability and resonate with the discerning Indian consumer. Bajaj Electricals delivers home and kitchen appliances that bring together consistent performance, refined aesthetics and ow maintenance. l

- The business performance was impacted due to high reliance on weather-dependent products. This softness was largely offset by strong growth in the kitchen appliances segment, led by mixer grinders and related categories. Products launched in FY 2025 continued to perform well, enabling the Company to fill portfolio gaps, expand price-range coverage and enhance competitiveness across segments. These efforts supported deeper engagement with quality-conscious buyers, sustaining market stability amid fluctuating demand conditions.

The Company also advanced its distribution and visibility through calibrated investments in high-impact retail touchpoints and priority channels, strengthening both product availability and brand presence. In addition, it focused on improving its channel mix, strengthening its presence in modern trade, and scaling digital platforms such as Q-commerce. Enhanced product displays and a more comprehensive assortment further strengthened consumer reach and product visibility.

Brand positioning efforts

The Company advanced its product development through a consumer-led, insight-driven approach, focusing on performance, convenience and user experience. New product offerings incorporated improved functionality, intuitive usage and contemporary design elements, aligned with evolving consumer needs across segments. This helped the portfolio remain relevant, differentiated and aligned with emerging lifestyle preferences.

Morphy Richards – Happiness engineered

Morphy Richards, an iconic British brand within the Bajaj Electricals portfolio, is positioned as a premium lifestyle brand offering home and kitchen appliances that blend contemporary design with advanced functionality. Following its complete acquisition, the brand has secured full strategic control, enabling sharper portfolio premiumisation, improved margins, and enhanced long-term value. By leveraging a rich global design legacy, the brand focuses on high-growth segments through sophisticated aesthetics, sleek form factors, and superior CMF (Colour, Material, Finish). The integration of high-quality materials, such as metal finishes and premium polymers, is complemented by an intuitive user interface and precision controls. This approach aligns the portfolio with global benchmarks, directly appealing to aspirational urban consumers seeking an elevated experience.

The business recorded stable growth, buoyed by positive momentum. The brand achieved high double-digit growth in Modern Format Retail and Premium channels, while e-commerce maintained stable single-digit growth in core categories. Modern appliances launched in the previous fiscal continued to gain traction, reflecting a consumer shift towards premium, multi-utility offerings and supporting long-term premiumisation. Strong product performance and design-led differentiation generated positive consumer feedback, while an improved service experience strengthened customer trust and supported higher repeat purchase intent.

Nirlep – Everyday Health

The Company is undertaking a comprehensive strategic realignment to stabilise performance and restore growth momentum following a double-digit dip in the Nirlep business during FY 2026. This strategy includes expanding Nirleps presence across all sales channels, such as e-commerce and modern retail, to improve reach and availability. Additionally, the Company has identified and initiated steps to address specific gaps in pricing and distribution that have previously impacted performance.

Market trends show an uptrend in stainless steel and triply products, even as the aluminium-based non-stick segment experienced a decline. This shift is primarily driven by heightened food safety concerns among consumers, prompting a migration toward stainless steel-based alternatives.

Trade sales channel

The trade sales channel serves as a critical engine for Bajaj Electricals, anchoring its market presence and providing the primary momentum for its business growth. In FY 2026, the General Trade and distributor network contributed around 60% revenue to the overall business. To address this performance and enhance market share, the Company introduced new pricing strategies. In a continued effort to strengthen market relations, the Company focused on retailer engagement, incentives and in-store activities to augment sales and build brand loyalty. Much of this was managed through the Market Place app, which maintained a steady connection with enrolled retailers and active users.

The Company adopted a competitive pricing strategy for entry-level products to improve accessibility and drive deeper retail penetration. This approach elevated throughput across mass segments, particularly in price-sensitive markets. The Company also enhanced its operational efficiency by using digital enablement across the entire trade network. Tools such as DMS, the Sarathi App, the DSO App and Power BI provided end-to-end visibility, shortening order cycle times while improving tracking. This digital suite also strengthened distributor governance, increased transparency and created a scalable foundation for future growth. Furthermore, WhatsApp and other digital communication platforms helped coordinate new product launches, Retailer Bonding Programme (RBP) closures and local below-the-line initiatives. Combined with trade incentives and real-time coordination through the SAMRAT app, these efforts improved counter-advocacy and preserved market share in high-priority segments.

Alternate channels

The Companys alternate channel strategy adapted to a shifting market as the e-commerce channel entered a period of consolidation. While a dynamic competitive landscape and changing consumer demand impacted revenue momentum compared to the previous year, Quick Commerce gained significant traction in urban and semi-urban areas. By aligning with this trend, the Company established itself as a leading player in the Small Home Appliances (SHA) segment and achieved double-digit growth. Performance in Modern Trade channels, including National Food Retail and Regional Food Retail, remained steady due to seasonal fluctuations that impacted fans and air coolers. The emphasis for FY 2025-26 remained on new listings and promotional activations, new category introductions and exclusive launches. Throughout the year, the channel boosted consumer conversion rates through a mix of in-store/out-of-store activations, cross-promotions and by leveraging the festive demand.

The Company broadened its international footprint in FY 2026 through targeted market initiatives. In Sri Lanka, it introduced new appliance categories and strengthened the Morphy Richards presence through its established partner. In Nepal, it implemented DMDC-based distribution for ceiling fans while consolidating appliance sales. Meanwhile, in Dubai, efforts focused on re-export partners with a consistent monthly push to augment market share in the ceiling fan segment.

Consumer Care

Bajaj Electricals prioritises after-sales support through a structured consumer care ecosystem. Operational efficiency was bolstered by digital enablement, including WhatsApp call registration, chatbots, video support, and a unified CRM, which streamlined query handling. A strategic transition moved all service communication from SMS to WhatsApp, improving accessibility and transparency. Consequently, usage of digital engagement tools reached 20% in FY 2026, reflecting strong customer adoption and initiative effectiveness. To further streamline customer experience, the Company introduced a voice bot for quick call registration and QR codes for instant self-complaints. The ‘SANSKAR technician training programme was also rolled out across crucial markets, helping resolve 71% of issues within just 12 hours. As a result, the Net Promoter Score witnessed considerable improvement over the course of the year, indicative of strong customer trust. Additionally, the ‘Fix It Yourself initiative gives people the resources they need to handle minor troubleshooting on their own.

The Golden Hour initiative improved responsiveness by ensuring technician contact within an hour, reducing escalations. Service network expansion and additional staffing enhanced reach and turnaround efficiency. Simultaneously, cross-functional teams used customer insights to refine product quality, restructure warranties, and implement repair-based home services in select categories.

As the Company looks ahead, improving customer experience, digital services and network capabilities remain key priorities.

The Consumer Products segment is transitioning to a demand-led, secondary-driven model aimed at improving margin quality, working capital efficiency, and overall sustainability of growth. At the same time, the focus remains on cost optimisation and operational improvements, with stable market share and strong brand presence supporting the business fundamentals

Lighting Solutions

The Lighting Solutions business of Bajaj Electricals remains a significant contributor to the Companys diversified portfolio. FY 2026 was a year of consolidation for the Professional Lighting business as it strengthened its position as a total solutions provider and recorded growth across applications. The business maintained a balanced inflow mix, with infrastructure contributing to volume while commercial and public-space segments emerged as important drivers of value. Margins remained healthy, supported by disciplined pricing and cost optimisation, ensuring profitable growth.

Consumer lighting

The consumer lighting segment delivered steady progress in FY 2026, as companies broadened their portfolio into adjacent categories, such as wires and switchgear. The core lighting segments remained stable, led by consistent traction in trade channels. This strategic diversification, along with improved front-line margin performance, translated into a stronger margin profile for the year. Sustainability considerations were integrated more deeply into operations, with alignment to Extended Producer Responsibility (EPR) guidelines through partnerships with certified e-waste suppliers and the adoption of QR-enabled product traceability. Notably, packaging also evolved into a vehicle of engagement, exemplified by the LEDZ inverter series, where QR codes were used to communicate social initiatives and deepen consumer engagement.

Innovation continued to propel growth. Advancements in R&D and product engineering resulted in the launch of the Compact Batten Neo, an expanded panel portfolio and various cross-category concept projects. Quality and engineering enhancements, specifically stronger validation and VOC-led development, successfully reduced LED market returns and ensured high first-time right outcomes. These technical strides were complemented by targeted digital initiatives, including influencer-led campaigns around festive and premium outdoor lighting, which amplified consumer engagement and accelerated product adoption. Bajaj has successfully transitioned into a lifestyle and design-led brand, with a growing premium and decorative portfolio spanning brands such as Velaris and Zela and strengthening its ceiling and outdoor segments. This strategic shift towards a higher premium mix and value-added categories resulted in increased growth, further supported by new festive range SKUs. The strategic focus

Professional Lighting

In FY 2026, the Professional Lighting business entered a phase of consolidation, strengthening its position as a credible end-to-end solutions provider while delivering growth across varied applications. The portfolio remained balanced, with infrastructure continuing to serve as the volume backbone, while commercial and public-space lighting emerged as notable margin accretive segments. A disciplined approach to pricing and cost optimisation enabled the business to preserve a resilient and sustainable margin profile. The Company improved safety and precision using automation and sensors for real-time lighting adjustments, while R&D-led engineering and premium materials ensured reliability across diverse environments. Efficiency gains were realised through intelligent dimming systems, data-led optimisation and refined thermal management, translating into lower lifecycle costs. The integration of IoT-enabled architectures and solar solutions further elevated the Companys role in complex infrastructure projects such as tunnels and stadiums, enabling capabilities such as remote monitoring, predictive maintenance and alignment with evolving sustainability imperatives. As the business moves into FY 2027, the Professional Lighting business plans to strengthen its competitive edge through R&D and digital integration, with an emphasis on ultra-efficient solutions that reduce carbon footprints. Growth efforts will be pursued across segments like infrastructure, sports, office spaces and data centres, alongside a diversification into solar solutions. To improve bid selection and win probability, the Company will also implement AI-driven Tender Intelligence Analytics.

Switchgear

Bajaj Electricals has forayed into the switchgear segment with the launch of the BAJAJ SECURA brand. This marks a strategic expansion of the lighting solution business. The move extends its generational expertise into a new category, one that plays a critical role across households and workspaces.

The switchgear portfolio comprises Miniature Circuit Breakers (MCBs), Residual Current Circuit Breakers (RCCBs), isolators, changeover switches and Distribution Boards (DBs), each designed to deliver uncompromising safety, ease of installation and consistent long-term performance.

Wires

Bajaj Electricals has augmented its lighting solutions portfolio with the launch of its Wires range, further strengthening its lighting solution business. The wires portfolio is designed to cater to the rising demand of safe, reliable and high-performance wiring solutions for residential applications.

Outlook

The Companys growth strategy places emphasis on consolidating core segments such as industrial and urban lighting to ensure stability while expanding into emerging areas such as transit systems, stadiums and placemaking applications. On the technology side, the focus remains on Smart Connected Lighting and solar street lighting. Market priorities include growing the solar solutions business and exploring adjacent opportunities to achieve sustainable, diversified growth.

Research and Development

Bajaj Electricals views innovation as the instrumental driver of its future success. The R&D function has strengthened the innovation ecosystem across consumer products and lighting by integrating consumer insights, hackathons and external partnerships. This collaborative approach has yielded new technology solutions in electronics, IoT and energy efficiency, resulting in substantial creation of intellectual property.

Sustainability considerations were integrated as a key R&D metric by developing energy-efficient architectures and reducing material usage. By using digital simulations and reliability-driven design, the Company shortened development times and extended product longevity and performance consistency. The Companys R&D direction is guided by a platform-led roadmap that advances premiumisation and smart differentiation. This is supported by a three-year plan that prioritises execution and cost excellence, consumer insights and technology scouting. Looking ahead to FY 2027, focus will be on deepening capabilities in advanced simulations, AI and ML-based models and core tech domains like IoT, solar and motors. These efforts are supported by structured training and career paths aimed at building specialised, future-ready expertise. offer mental health support, highlighting the Companys holistic approach to employee safety and care. Through these multifaceted efforts, Bajaj Electricals continues to strengthen its EHS performance, create a safe work environment and build a culture where every employee feels secure, supported and empowered.

Integrated Supply Chain Management and Manufacturing

Amid a year characterised by supply chain volatility, the Company ensured supply continuity by strengthening its supply resilience through increased localisation, supplier diversification and the use of alternative materials. For critical imports such as LED components sourced from China, the Company maintained a three-month inventory buffer and developed multiple vendors for high-volume items. This approach was supported by a digital backbone comprising Anaplan, AI/ML algorithms and Power BI dashboards for real-time visibility. By integrating tools such as TMS, WMS, PLM and Ariba, the Company streamlined workflows and enhanced operational agility across the entire supply chain. The Companys strategic collaboration with suppliers expedited product launch processes and ensured compliance with evolving regulatory standards such as BEE and BIS. By partnering with design and development experts, the Company quickly expanded into adjacent categories of switchgear and wires. These partnerships helped the Company in maintaining a balance between speed to market and rigorous benchmarking. The Company ensured optimal inventory levels while sustaining high service standards. Capacity augmentation in cooktops and careful planning for seasonal categories such as water heaters ensured operational readiness. The adoption of new direct dispatch and cross-docking models further improved delivery efficiency and customer satisfaction.

The Companys supply chain strategy is driven by two key programmes, Hello Local and Mulya.

Hello local

The Hello Local programme has significantly reduced import dependency, effectively mitigating risks associated with materials sourced from China. By partnering with domestic suppliers under the Make in India initiative, the Company transitioned to local components while maintaining superior quality standards and energy efficiency. This expansion of the local ecosystem has notably improved supply security, cost competitiveness and operational resilience.

In FY 2027, the Companys supply chain agenda will be anchored in scaling Nex, Morphy Richards and its premium appliance portfolio by strengthening resilience and advancing cost optimisation. Key objectives include ensuring on-time product launches through close supplier alignment and maintaining high OTIF (On-Time In-Full) performance through strict inventory discipline. The Company will also prioritise enhanced planning and agile operations to support this growth trajectory.

Quality Assurance

The Company improved product durability and safety by bringing manufacturing in-house and implementing strict multi-stage inspections. Digital quality controls and automated testing ensured consistency in safety standards, while end-to-end management enabled tighter control and better failure traceability. Technical upgrades further strengthened reliability and reduced field failures.

This commitment to quality extended across the supply base, where structured audits, capability building and quality scorecards strengthened supplier processes and accountability. These initiatives ensured early defect detection and stable production, driving continuous improvement across the entire value chain. Furthermore, the Company regularly analysed Customer Relationship Management (CRM) feedback and warranty data to create a direct feedback loop between field performance and R&D for better design and installation.

Internal audits and third-party certifications from organisations such as TUV Nord strengthened compliance and customer confidence. Independent verification confirmed that manufacturing processes meet global standards, ensuring consistent safety validation and operational discipline. These regular checks resulted in stronger regulatory compliance and enhanced brand credibility by guaranteeing safer products for the consumer.

Technical precision was bolstered by Statistical Process Control (SPC) and QR-based serialisation to improve real-time monitoring and product tracking. Advanced tools like Automated Optical Inspection (AOI) and automated testing increased defect detection, while Six Sigma and 8D analysis improved problem-solving. Supported by Customer Relationship Management (CRM) systems and digital dashboards, these initiatives ensured high accuracy and significantly reduced defects and service costs. In FY 2027, the Company will direct its focus towards lowering the Cost of Poor Quality (CoPQ) and market complaints by strengthening supplier audits and capability building. Key priorities include improving First Time Right (FTR) levels and enhancing overall product reliability. The Company will also ensure robust validation for new solar and architectural lighting products to maintain its high standards of safety and performance.

Information Technology

Technology remains an integral aspect of how Bajaj Electricals operates and grows. Bajaj Electricals has built a future-ready ecosystem by leveraging AI, ML and advanced analytics to move towards an agile, data-driven enterprise model. SAP enhancements and system integrations under the Nysa 2.0 programme transformed operations by creating a unified digital backbone with standardised processes and a single source of truth for master data. Procurement and P2P processes were digitised, improving speed, minimising errors and reducing manual effort.

Consolidated Financial Analysis

In crores ( )

Key Financial Ratios

Refer note 47 of the standalone financial statements for the key f inancial ratios

Risk Management

The Board of Directors oversees the Companys risk management and internal control architecture. It defines risk appetite, monitors vital risk exposures and reviews audit findings to ensure the integrity of control systems and governance practices. For a comprehensive understanding of the risk management process, please refer to page 38 of the report.

Internal Control Systems and their Adequacy

The Company has an established, strong and well-structured internal control framework that is commensurate with the size, scale, diversity and complexity of its operations. These controls are intended to support efficient operations, ensure reliable financial reporting and maintain compliance with applicable laws and regulations.

Internal controls were observed to be functioning properly throughout the year. The Company had recruited an external consultant as an Internal Auditor to test the robustness of these controls and to cover all business units, offices, factories and critical areas of operation. The design, adequacy and operational efficiency of the Companys Internal Financial Controls are reviewed by both the external consultant (Internal Auditor) and the statutory auditor.

The internal control framework has been developed in line with the provisions of the Companies Act, 2013 and the Guidance Note on Audit of Internal Financial Controls issued by the Institute of Chartered Accountants of India. Throughout the financial year, key internal controls were found to be operating effectively across the organisation. For all functions, the Company has documented Standard Operating Procedures (SOPs) and risk and control registers outlining process flows, key risks and control points. These documents are reviewed and updated regularly to reflect changes in workflow, process and controls The external consultant (Internal Auditor) assessed the internal financial controls and found certain non-significant automated controls not configured, which were mitigated by compensating manual controls. Any control weaknesses identified were promptly communicated to the process owner and remedial actions were implemented or agreed upon in a timely manner.