Bajaj Electricals Ltd Management Discussions

Global Economic Overview

The global economy, in CY 2024, experienced a period of mixed performance due to several persistent and emerging forces. In spite of setbacks, most regions witnessed a gradual stabilisation due to accomodative monetary policies, supply chain realignments of and the growing adaptability of both consumers and businesses to new economic realities.

In CY2024, the global economy grew at 3.3%, showing resilience amid geopolitical tensions, trade fluctuations and shifting monetary policies. Advanced economies grew modestly at 1.8%, while emerging markets and developing economies expanded more robustly at 4.3%. Among advanced economies, the United States registered a strong growth rate of 2.8% in CY 2024, supported by a more accommodative monetary policy and resilient demand. Countries in Europe grew at a modest pace, mainly due to geopolitical tensions and a weak manufacturing sector. In contrast, China recorded a lower-than-expected growth rate of 5.0%, driven by sluggish consumption, low consumer confidence and delayed stabilisation in the property market.¹ Global headline inflation continued its downward trend, easing from 6.6% in CY2023 to 5.7% in CY2024.² The forecast for non-fuel commodity prices remains largely stable, while inflation in advanced economies is expected to ease with a downward revision. However, the pace of decline varied across regions. Advanced economies made steady progress towards inflation targets, while emerging markets grappled with high inflation due to currency depreciation and persistent supply chain issues. Major central banks began shifting away from tight monetary policies as inflation eased, implementing gradual interest rate cuts to boost liquidity and stimulate private investment. However, the global trade landscape remains unstable, with recent tariff implementations creating significant challenges for businesses. In response, businesses are re-evaluating their pricing strategies to maintain competitiveness while protecting profit margins.

Indias Economic Overview

The Indian economy sustained its strong performance and established its position as one of the worlds fastest-growing major economies despite global headwinds such as trade-related uncertainties and tariff impositions. In FY 2025, the Indian economy grew by 6.5%⁹ and this growth was driven by a strong domestic consumption, strategic policy initiatives undertaken by the Government of India to boost the manufacturing sector and strong focus on infrastructure investments.³ The industrial sector grew by 6.2% in FY 2025, supported by strong growth in construction and essential services such as electricity, gas, water and other utilities. The services sector is also likely to perform well, with an estimated growth of 7.2%.⁴ Indias services exports saw an encouraging rise of 12.8% in FY 2025.⁵ In FY 2025, the total FDI inflow was USD 81.04 billion.

Moreover, the number of source countries for FDI increased from 89 in FY 2013–14 to 112 in FY 2024–25, positioning India as a favourable investment destination among global investors.⁶ Indias bilateral trade negotiations with the US may act as a positive tailwind for exports. Moreover, the ongoing realignment of global supply chains is prompting many manufacturers to shift their base from China and Vietnam to India, driven by tariff advantages and strategic benefits. Continued government focus on capital expenditure, stable inflation, increasing investor participation and resilient rural demand have collectively fuelled Indias economic momentum.

Industry Overview

Consumer Products

Appliances

The consumer appliances industry in India is charting a strong growth trajectory, shaped by a rising appetite for smarter, energy efficient and more sophisticated products. Consumers are increasingly drawn to appliances that combine advanced functionality with superior energy efficiency and connectivity. The premium segment, in particular, is witnessing accelerated growth, fuelled by higher disposable incomes, shifting lifestyle aspirations and a growing preference for products that reflect global standards in quality and design.

While the consumer appliance sector faces rising input costs and supply chain bottlenecks, momentum remains positive. A shift toward premiumisation is visible, driven by rising demand from younger, tech-savvy consumers. In addition, tailwinds such as rapid urban development, the expansion of residential infrastructure, broader economic growth and increasing access to smaller towns and rural markets are expected to further drive demand.

On the supply side, government-led manufacturing initiatives such as the Production-Linked Incentive (PLI) scheme supports greater domestic production, encouraging capacity expansion and local sourcing, strengthening the manufacturing ecosystem. The consumer electronics and home appliances sector plays a vital role in supporting Indias growing economy, with its growth serving as a clear indicator of rising standards of living. The consumer durables sector in India contributes around 0.6% to Indias GDP and is expected to further grow by a CAGR of 11% to reach C3 lakh crores by FY 2029. This growth is attributed to increasing disposable income leading to increased consumer spending, changing customer behaviour, technological innovations and urbanisation. Government initiatives such as Make in India, Atmanirbhar Bharat and Viksit Bharat have already begun to make a meaningful impact and will further boost and scale up Indias electronics manufacturing capabilities.

Fans

Indias ceiling fan industry is undergoing a transformation, driven by the adoption of modern BLDC motor technology, rising energy consciousness and evolving consumer aspirations. Customers have become more design conscious and environmentally aware, seeking fans that offer both efficiency and aesthetic appeal. Increased spending on home interiors and housing infrastructure continues to support market growth. Premium fans that blend comfort with style are gaining popularity, particularly among homeowners looking to enhance interior spaces.

Manufacturers are shifting focus to innovation, energy efficiency and contemporary design to cater to the needs of the market. The push for quality is further reinforced by mandatory BIS specifications and ISI marking for ceiling and table fans. With ongoing rural electrification and growing demand for smarter, stylish products, the ceiling fan market in India is well-positioned for sustained growth.

The Indian ceiling fan market size was valued at 43.1 million units in 2024 and is expected to reach 52 million units by 2033, at a CAGR of 2% during this period.⁹ This expected expansion in market size is driven by increasing temperatures across India necessitating cooling solutions, along with growing investments in the housing sector by the government.

Lighting Solutions

Professional Lighting

The professional lighting sector is experiencing significant growth, driven by rapid urbanisation and surge in infrastructural development. As India carries on with the expansion of cities and transportation networks, there is a growing demand for specialised lighting solutions that cater to large-scale projects, including transportation hubs like airports and metro stations, public infrastructure such as highways and bridges and commercial establishments including office buildings and malls. This demand is further fuelled by the countrys increasing focus on smart city initiatives and sustainable urban planning.

As urban areas develop, there is a significant push towards using lighting technologies that minimise energy consumption and carbon footprint. In addition to energy efficiency, there is a rising focus on the aesthetic value of lighting, especially in architectural projects. The demand for facade lighting and decorative illumination is increasing, as cities seek to enhance their visual appeal through lighting that complements architectural styles and highlights key landmarks.

Consumer Lighting¹⁰

The residential lighting sector is undergoing a significant transformation driven by continuous innovation in technology, rising consumer demand for sustainable solutions and an increasing emphasis on energy efficiency. Widespread adoption of LED technology has shifted consumer preferences away from traditional fluorescent lighting, driven by superior energy efficiency, durability and lower operating costs.

The market is shifting towards solutions that not only meet high energy efficiency standards but also enhance the quality of life. This shift is propelled by the growing popularity of smart lighting systems and Human-centric Lighting (HCL), which provide added convenience, comfort and energy savings. The advent of the Internet of Things (IoT) has further accelerated this trend, allowing for seamless integration of lighting systems with smart home devices and platforms, enabling enhanced automation and remote control.

In addition to technological advancements, global trends such as smart cities projects, rapid urbanisation and industrialisation are further driving market growth. As the market evolves, there is an increasing demand for customisable lighting solutions that offer aesthetic appeal and personalisation, making lighting an integral part of home d?cor and interior design. At the same time, competition is intensifying, especially with new and smaller players entering the market, who focus on low-cost pricing strategies and are rapidly adopting the latest technologies. The lighting industry was estimated to be valued at USD 4.93 billion in FY 2025 and is projected to reach USD 6.77 billion by FY 2030, growing at a CAGR of 6.55% during this period.

Company Overview

Bajaj Electricals, a trusted name in Indian households and a proud part of the $167 billion Bajaj Group, has built a legacy of excellence since its establishment in 1938 by Shri Jamnalal Bajaj. With over eight decades of innovation, the Company has consistently delivered consumer-centric, aesthetically advanced and technologically superior products and solutions. Headquartered in Mumbai, the Company operates two primary businesses – Consumer Products (Appliances, Fans, Non-electrical Kitchen Aids) and Lighting Solutions (Consumer and Professional Lighting), remaining sharply focused on strengthening its core consumer offerings and lighting portfolio. The Company has a robust pan-India footprint, with 19 offices, over 850 distributors, around 1.7 lakh retail outlets and over 660 consumer care centres serving over 19,000 pin codes. Its brand portfolio includes Bajaj, Morphy Richards, Nirlep and Nex, catering to a wide spectrum of Indian consumers.

With a deep-rooted commitment to sustainability, innovation and inclusive growth, Bajaj Electricals continues to enhance everyday living through meaningful products and responsible practices. The Companys commitment to Corporate Social Responsibility (CSR) and philanthropy is channelled through the Bajaj Electricals Foundation. With a clear purpose of "Driving sustainable change, for a better tomorrow," the Foundation strives to create a better planet and a better life for all.

Business segment overview

Consumer products

The Consumer products business of Bajaj Electricals continues to build on its legacy of trust and innovation by offering comprehensive range of fans, kitchen and home appliances. With a strong focus on aligning with the evolving needs of the consumers, the Company remained committed to delivering high quality, efficient and contemporary solutions for its customers. The Companys strategic ‘house of brands approach facilitates a diverse portfolio that has been instrumental in deepening brand connect and expanding its consumer base. Each brand under the Bajaj Electricals umbrella offers a distinct value proposition, helping the Company address varied consumer segments with greater focus.

The year also marked continued emphasis on product premiumisation, innovation and enhanced design language, aimed at delivering a rich consumer experience. Several new product launches across categories were supported by impactful campaigns and improved visibility.

During FY 2025, the revenue generated from the consumer products business stood at C 3,806 crores. Bajaj Electricals aims to maintain its position in the market while deepening its relevance in the lives of millions of Indian households.

Bajaj – Built for Life

Consumers today lead fast-paced lives, characterised by ambition, resilience and a desire for seamless experiences. They seek appliances that offer reliability, ease and endurance. Understanding these evolving needs, Bajaj continues to deliver on its brand promise of durability with a focus on building products that truly resonate with the evolving needs of the discerning Indian consumer.

At the core of the brands strategy is the powerful positioning of ‘BUILT FOR LIFE, a commitment to durability and contemporary design. This positioning is embedded into every touch point, from product development to all marketing communications, ensuring that the brand consistently delivers reliable, tough-built appliances that complement the dynamic lives of its consumers. Each product across categories is designed with avant-garde durability features that conveys the core brand promise. In FY 2025, the Companys strategic focus was on expanding the Fans portfolio, while also introducing a wide range of new products across key categories such as Mixer Grinders, Juicer Mixer Grinders (JMGs), Water Heaters and Air Coolers. These new launches have been well-received by both consumers and trade partners, gaining solid traction in the market and contributing to a performance in several segments.

New launches from the past three years now account for over 57% of the total revenue of Bajajs Consumer Products business, highlighting the success of the innovation-led approach. All brand transformation initiatives during the year were anchored in the objective of achieving clear differentiation in a competitive market landscape.

Brand positioning

The ‘Built for Life narrative has remained central across all marketing efforts—spanning digital campaigns, retail activations and multimedia outreach focused on key product categories. The

Company brought its ‘Built for Life ethos to life through compelling multimedia campaigns. These covered key product categories like fans, air coolers, water heaters and mixer grinders. The campaigns aimed to inspire and empower consumers to pursue their dreams and passions, while positioning Bajaj as a dependable partner in their journey. The campaign, while highlighting the durability and reliability of Bajaj appliances, struck a chord with the modern, resilient Indian consumer, underlining their ability to achieve anything they set their minds to.

Through its sustained focus on innovation, differentiated design and meaningful brand communication, the Company has reinforced consumer trust, positioning itself as a brand that delivers durability, design and dependability.

Nex – Feel the future

Nex continues to make significant strides in the premium home appliances business, positioning itself as a symbol of superior performance, sophisticated design and leading-edge technology. The brand has always focused on delivering high air thrust, low-noise functionality and a fluidic design that seamlessly integrates into modern homes. As a part of Bajaj Electricals strategy to cater to the affluent and tech-savvy urban consumer, Nex products are developed with an emphasis on premium aesthetics, advanced materials and technological features that ensure greater performance. In FY 2025, Nex has made significant progress with a remarkable almost five-fold topline growth, driven by an expanded presence in both online and offline channels. While FY 2024 laid the foundation for Nexs presence in the e-commerce space, the brands expansion into general trade and regional modern retail formats has significantly boosted its reach. Nex has also broadened its product portfolio with the introduction of Air Coolers, which have seen positive market reception and strong sellouts to key trade distributors. Moreover, the brand has successfully onboarded ~324 direct dealers and continues to expand its premium retail network to meet the growing demand for high-quality, performance-driven products.

As part of its commitment to innovation, Nex has reinforced its product performance with a higher air thrust than conventional fans in FY 2025 and continues to invest in advanced materials and technology for an even more elevated sensorial experience. The brand is currently developing new features, such as low-noise aluminium blade fans, slim plastic blade designs and IoT smart tech integrations, which will redefine the consumer experience. Looking ahead, Nex aims to expand its range of premium fans with colour, material and finish options in the first half of FY 2026. Additionally, the brand plans to introduce slim and sleek plastic blade fans, smart tech solutions and mood lighting options to fill existing product gaps and cater to evolving consumer needs. In the Air Coolers category too, Nex aims to offer a diverse portfolio with digitally controlled models and energy-efficient BLDC-based cooling systems. Nex is poised to continue its growth trajectory by providing consumers with high-performance, aesthetically pleasing and technologically advanced products that meet the demands of modern homes. As the brand evolves, it remains committed to redefining the premium appliance category with features and innovations.

Morphy Richards – Happiness engineered

Morphy Richards, the iconic British brand under Bajaj Electricals portfolio, continues to elevate everyday living through an exceptional blend of elegant design and functionality that sparks happiness. With a legacy rooted in international design, the brand has become synonymous with sophistication and fine taste, evoking the essence of modern lifestyle, presenting a portfolio of well-designed products that go beyond basic utility to deliver a premium consumer experience.

In FY 2025, the brand increased its emphasis on modern designs, deepening its focus on sleek, international aesthetics and advanced features, responding to the growing consumer demand for appliances that seamlessly combine form and function. Emphasising a design-first approach, Morphy Richards reinforced its market stand by aligning its portfolio with new global trends and aspirational lifestyle expectations. The use of enhanced Colour, Material and Finish (CMF) standards across all products further elevated the overall product appeal, reinforcing the brands commitment to superior craftsmanship and aesthetic sensibility. The brand witnessed especially robust consumer pull in segments like air fryers, coffee machines, garment steamers and personal grooming devices. The growing demand for health-focused, convenience-oriented solutions has made these segments the growth drivers. These ranges have picked up considerable pace, indicating strong market acceptance and increasing consumer fondness towards Morphy Richards products.

In keeping with its plan to serve the aspirations of the Indian consumer, Morphy Richards is managing its product portfolio strategically, focusing on contemporary appliances and new product categories that are rapidly gaining traction in Indian homes. The product portfolio is conceived to provide not only utility, but as statement of style and sophistication—appealing to consumers who appreciate well-designed appliances that adds to the beauty of their living spaces. In FY 2025, the Morphy Richards business has registered a robust 24% growth, with consistent positive performance in both offline and online channels. The success of new products launched recently confirms the brands strategic direction in focusing on emerging high-growth categories, while consistently emphasising quality, innovation and design excellence.

The Company has continued to establish itself as an Iconic International British Brand, deepening its founding pillars of innovation, premium design and uncompromising quality. Leveraging international design inspirations and in-depth knowledge of local tastes, Morphy Richards has made its mark in the premium home and kitchen appliance category.

In the future, Morphy Richards will drive growth through product expansion and greater market penetration. The emphasis will be on introducing premium, lifestyle appliances that address the changing needs of todays lifestyle-driven consumers. With future launches in both current and adjacent categories and a robust pipeline of products centred on global design and sophisticated features, the brand is poised to further consolidate its leadership in the premium appliance category. Moving forward, Morphy Richards is dedicated to bringing to the marketplace products that exhibit a symphony of luxury, practicality and innovation.

Nirlep

In FY 2025, Nirlep continued its expansion by launching its products in even more markets and channels, ensuring a wider reach and presence. While the brand introduced a differentiated range of cookware, the product line faced challenges in creating significant visual differentiation in the minds of consumers. As a result, it struggled to shift loyalty from well-established national brands. A major shift in consumer behaviour also emerged, with a growing preference for alternative materials over traditional aluminium-based non-stick cookware. This shift impacted Nirleps presence in the evolving cookware market, as the brand currently lacks offerings in these newer, trending materials.

The Company was proactive in its marketing efforts, raising awareness of its new range by placing below-the-line (BTL) elements across key counters and running a social media campaign in association with its brand ambassador, celebrity chef Kunal Kapur. This campaign contributed to engaging the target audience and reinforcing the brands presence in the market.

Review of distribution channels

Trade sales channel

The trade sales channel plays a significant role in reinforcing market presence and driving growth of Bajaj Electricals. FY 2025 saw signs of strong revival in the trade business, with growth in H2 (7.5%) surpassing that of H1 (3.3%), resulting in a full-year growth of 6%. Notably, the air cooler category demonstrated exceptional performance with growth exceeding 65%, driven by targeted initiatives and seasonal alignment.

To improve competitiveness and retail effectiveness, the Company strengthened its price positioning across retailers while complementing its ongoing premiumisation drive. In addition, a performance-linked channel partner incentive programme was rolled out in Q4 to boost partner engagement and drive sales momentum. Bajaj Electricals continued to deepen its rural market outreach by strengthening its network of super stockists, successfully, thereby enhancing product availability and brand reach in underpenetrated areas.

Operational efficiency received a boost through continued digital enablement. The use of tools such as the Distributor Management System (DMS), DSO App, Supervisor App (Sarathi) and Power BI, along with structured retailer training and engagement, has led to improved visibility, tracking and governance across sales operations. In a bid to strengthen retailer engagement, the Company conducted multiple retailer meets across key markets. In addition, a dedicated WhatsApp platform was developed to ensure seamless and timely communication of business updates, new product launches and brand campaigns, thereby reinforcing relationships and ensuring agility in execution.

With a sharpened focus on execution, digital enablement, rural reach and premiumisation, Bajaj Electricals is well-positioned to accelerate growth and further consolidate its leadership in the trade channel.

Alternate channels

In FY 2025, the alternate channel for consumer products, accounted for approximately 43% of the total revenue of the consumer products business. The year-on-year (YoY) growth rate was a subdued 4% due to significant demand pressures observed across all segments throughout the year. The e-commerce channel also showed a similar trend for consumer products, with a single digit growth rate. This is attributed to a drop in consumer demand at a broad level and extensive competitive disruption. While e-commerce faced heightened challenges, the modern trade channels, National Format Retail and Regional Format Retail, registered strong growth with an increased rate of approximately 15%, contributed around 13% to the total consumer products revenue. This is mainly driven by the various in-store and out- store activities undertaken, cross promotions and combo offers to boost consumer conversions. The Quick commerce channel has started to gain significant momentum, especially in urban and semi urban geographies. The Company has aligned to this trend effectively and is currently one of the leading players in the Small Home Appliances space.

Tapered growth was seen in the B2B institutional channel as a result of the entire channel encountering major budget cuts from both the government and the private sector. Stricter RBI guideline also severely impacted the operations of the Micro Finance Institutions. The lighting industry saw the alternate channel contribute 16% of the total revenue, with channels like e-commerce and modern trade registering double-digit growth. The latter two channels are fast becoming the preferred platforms for consumers. Bajaj Electricals, through FY 2025 has broadened its global footprint. The Company has ventured into new geographies, expanding into East Africa, parts of Asia-Pacific and the Middle East. The Company has also formed new partnerships in existing markets like Sri Lanka, Nepal and Kenya. Despite facing major challenges due to political turmoil in Bangladesh, the Company registered a growth of 19% YoY in exports.

Consumer care

At Bajaj Electricals, encouraging meaningful and lasting relationships with consumers remains at the heart of its philosophy. The Company continues to evolve its customer care framework through a range of strategic initiatives that not only enhance service quality but also deepen consumer trust and satisfaction. In FY 2025, Bajaj Electricals further strengthened its customer-centric approach by deploying innovative service models and expanding its digital capabilities to ensure faster, more seamless support experiences. Consumer feedback is utilised to enhance the overall customer experience and is shared with Quality Assurance (QA) and Research and Development (R&D) teams to drive product improvements and innovation.

Building on its digital transformation journey, the Company continued to optimise the Online Call Resolution (OCR) system to further improve turnaround times and issue resolution accuracy. Enhanced digital engagement channels, including WhatsApp call registration, chatbot and video chat feature were instrumental in providing consumers with accessible, real-time support options. Of these, WhatsApp chatbot and web form are made available for consumers 24*7. These platforms have helped the Company address consumer concerns with greater efficiency.

To accelerate service delivery, Bajaj Electricals further expanded its service network, resulting in improved reach and faster grievance redressal. The Company has increased its total Bajaj

The Company has over 660 Bajaj Consumer Care Dealer (BCCD) network, serving over 19,000 pin codes.

To further enhance customer experience, the Company extended call centre hours from 9 am to 9 pm, launched Sanskar - a soft skill training programme for technicians, implemented QR-based complaint registration to make the process easier and smoother and launched a new customer relationship management system.

Lighting solutions

With the lighting industry undergoing a significant transformation driven by technology, sustainability and design, Bajaj Electricals is strategically positioned to lead this evolution. The Company continues to invest in R&D and product development, offering innovative, energy-efficient lighting and smart solutions across its consumer and professional businesses. From smart and connected lighting systems for modern homes, to high-performance, human-centric solutions for commercial and infrastructure projects, Bajaj Electricals is advancing up the value chain, meeting diverse consumer needs while setting new benchmarks in quality, efficiency and aesthetics.

Professional lighting

In FY 2025, Indias professional lighting industry continued to evolve at a rapid pace, driven by growing urbanisation, increasing infrastructure investments and rising demand for energy-efficient solutions. The continued emphasis on sustainability and digitisation has further propelled the market towards intelligent and connected lighting systems. Bajaj Electricals remains at the forefront of this transformation with a comprehensive portfolio of smart, connected lighting solutions tailored for diverse applications and sectors.

The Company has established itself as a pioneer in the connected lighting space, having been a first mover in offering intelligent, smart street lighting solutions for cities and gated communities. In FY 2025, the Company extended this connected ecosystem across new application areas including industrial, commercial office spaces, tunnels, sports arenas and facade lighting. The Companys installation and commissioning projects strictly adhere to international industry standards, ensuring optimum functionality, safety and energy savings. Each project is delivered with a focus on achieving precise lighting and uniformity levels, along with automation-driven energy optimisation and long-term maintenance support, thus offering clients reliable, low-maintenance and cost-effective lighting infrastructure.

In tandem with the growing awareness and adoption of IoT-enabled solutions, Bajaj Electricals is actively developing a new generation of modular, IoT-based connected lighting. Strategic partnerships with global automation technology leaders are also underway to introduce cutting-edge smart lighting solutions in the Indian market for both indoor and outdoor applications.

Consumer Lighting

The consumer lighting business is undergoing a rapid transformation, driven by technological innovation, evolving lifestyle preferences and a growing emphasis on energy efficiency and sustainability. Consumers today are increasingly opting for smart, connected and design-forward lighting solutions that not only reduce energy consumption but also enhance the quality of life. With the widespread adoption of LED technology and the rise of smart homes, lighting has become a key component of modern living. In this dynamic environment, Bajaj Electricals continues to innovate and adapt, offering a diverse portfolio of energy-efficient, user-friendly and visually appealing lighting products tailored to the evolving needs of todays households.

The Company has significantly expanded its portfolio of energy-efficient LED products, addressing the evolving requirements of household consumer. The Company offers a comprehensive suite of lighting solutions designed to enhance residential illumination while concurrently reducing energy consumption. The consumer lighting market has been giving increased importance to aesthetics in lighting choices, with lighting now being central to home design. Bajaj Electricals, recognising this opportunity has adopted a design-first approach to product development. This design-led innovation, ensures that lighting solutions offer both visual sophistication and superior functionality to customers. The Company launched the ‘Built to Shine brand campaign, a campaign emphasising the Companys dedication to innovation and cutting-edge technology in lighting solutions.

With sustainability emerging as a key priority for todays consumers, the Company remains committed to developing environmentally responsible lighting solutions. The Company in FY 2025 launched 158 new energy-efficient LED products across lamps, battens, ceiling lights and outdoor categories. Each product is developed based on deep-rooted consumer insights and is designed to reduce energy consumption without compromising on performance or aesthetics. The Company also achieved a 47 bps reduction in defective rates % over the year, a reflection of the quality and durability of the products, minimising waste generation across the value chain.

Research and Development

With evolving consumer preferences, Bajaj Electricals has embraced the market trend of premiumisation. The Company has focused on developing smart and connected solutions to cater to consumer expectations. The Company has been able to do this with continued investments in research and development, that incorporates a consumer-first approach in operations. The R&D Centre, plays an important role in Bajaj Electricals product development strategy. It enabled the launch of 929 new SKUs, as well as upgrades across categories in FY 2025. Bajaj Electricals collaborates with external innovation ecosystem for augmenting in-house research and development activities. The Company has formed strategic alliances with various reputed educational institutions and tech companies with the aim of advancing R&D. The Company also ensures that the R&D efforts align with sustainability goals. The Company focuses on creating eco-friendly products by incorporating sustainable materials and processes. In FY 2025, the Company introduced 401 SKUs contributing to areas like energy efficiency, reduction in active material consumption of product, improved use of recyclable materials and improved lifespan of critical components, thereby providing higher warranty to the end consumer. These efforts demonstrate Bajaj Electricals dedication to sustainability in their product development and operations.

Bajaj Electricals – Leveraging technology

Bajaj Electricals strongly believes in the power of digital technology and leverages it to drive innovation, enhance product design and deliver high-quality, consumer-centric solutions that align with evolving market needs and lifestyle preferences.

In order to stay ahead of the competition, the Companys research and development team regularly conducts competitive benchmarking across technology, features and trends as a standard procedure. Through continued investments in R&D, benchmarking, consumer research and constant analysis of the external environment, the Company has managed to stay ahead of change. Through these efforts, the Company is well on track for long-term success.

Human Resource

Bajaj Electricals believes that its employees are its greatest driving force and as a result is focused on the overall development of its human capital. The Company has established a stringent Human Rights Policy, which it follows stringently, demonstrating dedication to building a compliant business atmosphere, preventing instances of child and forced labour, eliminating discrimination and upholding freedom of association and speech. The Company ensures a safe and healthy working environment for its employees, as it is essential for a motivated and competent team.

Diversity and Inclusion is a key focus area for Bajaj Electricals. The Diversity and Inclusion Council carried out various initiatives and programmes throughout the year focusing on empowering women and fostering an inclusive workplace. The Company focused on hiring women talent in FY 2025 and currently has one assembly line in the manufacturing plant completely managed by women employees.

The ‘Return To Work programme was launched in 2024, designed to encourage women returning to work after a career break. The programme offers customised training sessions to these women to updated their skills and provides opportunity to connect with peers and leaders in their domain. The Step-Up programme is a six-month learning journey that focuses on providing the right skills and frameworks to help them achieve their ambitions. The Company is also a naturally inclusive organisation, employing five persons with disabilities (PwDs) as part of the organisation.

The Company introduced eight new talent engagement programmes and workshops in FY 2025, aimed at enhancing skills and creating an engaging environment. These programmes focused on developing current skills and building future skills across behavioural, functional and technical domains. The Company also encourages employee engagement by celebrating special days, festivals and cultural events across its offices and facilities, promoting a sense of belonging and inclusivity in the workplace.

The SPRINT management training programme, a Bajaj Electricals initiative for performance management and team leadership, has contributed significantly to the Company. The Company has integrated all learning and development initiatives through a Learning Management System that features over 500 learning courses. Apart from this, the Company also supports and facilitates certification courses for its employees from recognised institutes like IITs, IIMs & ISB.

The Company provides ample opportunities for its employees to perform to their full potential. Employees at all levels are recognised and rewarded for exceptional performance. The Annual Achieverz programme of Bajaj Electricals recognise employees that exhibit exceptional performance. The platform recognises and rewards employees under awards like Spot awards, Pride awards, Individual and Team Awards, with the objective of promoting and encouraging high performance in line with the Companys vision and objective. The ‘Sarvottam Club, established to recognise exceptional achievers, grants its members the opportunity for a fully sponsored international trip. The programme in FY 2025 was linked to employees participation in CSR activities as a criterion for entry into the club.

Employee Safety

At Bajaj Electricals, the safety, health and well-being of employees are paramount and integral to the Companys operational framework. The Company has built a comprehensive Environment, Health and Safety (EHS) and Environment, Social and Governance (ESG) strategy that not only complies with legal requirements but also fosters a strong culture of safety, transparency and care across all levels of the organisation.

In FY 2025, Bajaj Electricals significantly enhanced its EHS and ESG Annual Training Plan by implementing structured, role-based training across various operations. A total of 285 ESG related training sessions were conducted. All new employees undergo mandatory ESG induction training as part of their onboarding, while specialised sessions and daily safety briefings at the shop-floor level help reinforce awareness and precautionary measures. To ensure preparedness for emergency situations, the Company regularly conducts mock drills simulating real-life scenarios.

Bajaj Electricals continues to promote a proactive safety culture by encouraging the reporting of near misses, unsafe act and safety observations through its robust ESG portal. This digital platform allows for seamless tracking, swift corrective actions and data-driven improvements in safety processes.

In addition, the Company has prioritised employee well-being through initiatives such as increased Group Mediclaim Sum assured, customised medical camps across locations, over 50 wellness webinars and enhanced maternity coverage for women employees. Dedicated Employee Assistance Programmes (EAPs) 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

Geopolitical challenges continued through FY 2025, with disruptive events like the Russia-Ukraine war, Middle East conflicts, slowdown in China and tariff uncertainties. These external events have an impact, directly or indirectly on the Companys operations, mainly resulting in supply chain disruptions. During these disruptions, the Company continued to monitor the situation, assessing the impact on the items that are sourced. Risk management plans are updated in consultation with supply partners for stocking items that are prone to disruptions.

TheCompanyfollowsapartnercentricapproachinitssupplychain, with suppliers and vendors being referred to as ‘Supply Partners highlighting their crucial role in the Companys functioning. As part of the supply chain strategy, the Company has two key programmes – ‘Hello Local and ‘Mulya.

Hello Local

The Hello Local programme is an effort from Bajaj Electricals to reduce reliance on imports. The programme has significantly reduced reliance on imports, with import dependency falling from 16% three years ago to around 4% currently. The programme has two key pillars— Glocalisation and Vendor Development. Glocalisation focuses on sourcing globally competitive products from the local base, ensuring high-quality offerings for consumers. Vendor Development aims to broaden supply sources, increasing the availability of products that serve as alternatives to imports.

Mulya

The next phase of the Mulya programme centred on value creation, process improvements and cost savings. As part of the initiative, multiple workshops involving cross-functional teams, consultants and subject matter experts were held. The workshops focused on generating innovative ideas on key product categories. The programme in FY 2025, successfully generated a pool of ideas, having a potential to achieve over C80 crores in annualised savings. In order to ensure these ideas are translated into tangible savings, the Company has enhanced its execution process through efficient ideation, evaluation, testing, trials and implementation supported by regular reviews.

Quality Assurance

The Company ensures quality of its in-house manufactured technologically advanced premium products by ensuring usage of superior grade material, capacity and capability enhancement of supply partners, technology driven quality control measures and regular compliance with international quality standard. The Company conducts quality checks throughout the manufacturing process. Products are checked and verified at three points, inward, in process and before leaving the manufacturing plants. Stringent quality checks are undertaken at each of these points to assure quality and make sure that all products meet the BEE and BIS standards. The Company has quality control systems in place to ensure that products or services consistently meet defined quality standards and customer expectations. Bajaj Electricals integrates advanced technology and automation into its quality control processes to enhance accuracy, consistency and efficiency, reducing the need for manual intervention across its operations. Aside from quality, reducing manufacturing waste is also a key focus area for Bajaj Electricals. Internal audits are carried out twice a year, along with fortnightly manufacturing process audits and monthly assembly and raw material surveillance audits. No major non-conformance was observed in these audits, with minor flaws being addressed with swift corrective actions.

Leading provider of technical, quality and safety services, TUV Nord has certified all businesses of Bajaj electricals, demonstrating compliance with stringent quality and safety standards. The Company also has certified internal auditors that conduct regular audits to ensure compliance with international quality standards. Customer calls regarding quality-related concerns are processed through the Companys Customer Relationship Management

(CRM) system, with all concerns being recorded and quick resolution being undertaken.

Information Technology

Bajaj Electricals is deeply vested in utilising technology to drive growth. For FY 2025, the Company strategically leveraged SAP, Artificial Intelligence (AI) and Machine Learning (ML) technologies to drive business transformation across its value chain.

SAP serves as the foundational digital platform, integrating core business processes across various functions. The Company also upgraded the existing SAP S4 to SAP RISE on cloud, improving efficiency and giving the ability to drive digital transformation with strong digital core. AI and ML has also been embedded across various business functions to enhance decision-making, automate tasks, improve consumer engagement and drive innovation. The Company aims to create a workforce that is adaptable, innovative and capable of driving the Companys digital transformation and achieving its long-term goals. Keeping this as a focus area, the Company aims to build a resilient and adaptable operational team that can effectively navigate the rapid evolution of technology, mitigate potential challenges and leverage new advancements for continued growth and sustainability. The Company over the previous year, implemented a range of training and development initiatives to equip its employees with the skills necessary to leverage new technologies effectively. The Company invested in various training programmes to ensure employees understand the potential of AI and ML across various functions. Moreover, training on AI-powered tools, data literacy programmes and specialised analytics training, for roles requiring deeper analytical skills were conducted. The Company also partnered with Coursera to offer professional certificates in areas like Gen AI and analytics.

The adoption of AI, ML and advanced analytics in the Company has shown significant improvements in efficiency and productivity across various functions. These technologies have enabled enhanced decision making and forecasting, streamlined supply chain and operations, increased productivity and enhanced marketing and sales effectiveness.

Bajaj Electronics is also proactively preparing for potential challenges associated with rapid evolution of technology across its operational landscape through a multi-faceted strategy encompassing continuous learning and upskilling, robust data governance and cyber-security, ethical considerations in technology deployment, strategic partnerships and innovation ecosystems. By focusing on these key areas, the Company aims to build a resilient and adaptable operational landscape that can effectively navigate the rapid evolution of technology, mitigate potential challenges and leverage new advancements for continued growth and sustainability.

Ratio	FY 2025	FY 2024	% Change
EBITDA margin	7.5%	7.5%	4 bps
EBIT margin	4.5%	5.1%	(58bps)
PBT margin	3.5%	3.7%	(22 bps)
PAT margin	2.8%	2.9%	(16 bps)
Debtors turnover	3.9	4.0	(3.1%)
Inventory turnover	4.5	3.8	19.2%
Interest coverage ratio	3.1	3.7	(16.2%)
Current Ratio	1.2	1.2	6.2%
Return on net worth	8.4%	7.8%	60 bps

Risk Management

The Board of Directors at Bajaj Electricals are responsible for overseeing risk management and internal control framework. The responsibilities include establishing the Companys risk appetite, overseeing and evaluating risks and examining internal audit reports.

For a comprehensive understanding of the risk management process, please refer to page 28 of the report.

Internal control systems and their adequacy

The Company has an established, robust and structured internal control system that is commensurate with the scale, diversity and complexity of its operations. These controls are designed to ensure operational efficiency, the accuracy of financial reporting and compliance with applicable laws and regulations. To assess the strength and effectiveness of these controls, the Company engaged an independent external consultant to act as the Internal Auditor. The scope of the audit included all business units, corporate offices and critical areas of operation. The design, adequacy and operating effectiveness of the Companys Internal Financial Controls are jointly reviewed by the external consultant and the statutory auditor. Theseinternalcontrolsarealignedwiththeregulatoryrequirements specified under the Companies Act, 2013 and the Guidance Note 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 are regularly reviewed and updated based on changes in workflow, process and controls. On assessment of the internal financial controls, the external expert (Internal Auditor) found no significant control flaws. Where minor gaps or system limitations were identified, compensating manual controls were implemented. Remedial measures were promptly initiated in consultation with process owners to ensure continued control effectiveness.