BENGALURU (Reuters) – India’s Bajaj Electricals posted a smaller-than-expected first-quarter profit on Tuesday, hurt by dampened demand for kitchen appliances and price erosion in key lighting segment.
Its consolidated net profit fell 25% to 281.1 million rupees ($3.4 million) for the quarter ended June 30, missing consensus analysts expectation of 323 million rupees, as per LSEG data.
Net sales grew 4% to 11.52 billion rupees, falling slightly short of analysts estimate of 12 billion rupees.
However, the company said it was confident of a pickup in demand in the second half of this fiscal year, as consumer demand has already bottomed out.
KEY CONTEXT
India’s summer extends from March to May, but many cities experienced unusually warm weather in June as well, which led to a surge in demand for cooling appliances.
However, analysts said that demand for kitchen appliances remained sluggish and high competition in the lighting segment saw price erosion in the category, leading to home appliance makers posting mixed set of earnings during the quarter. Crompton Greaves and Whirlpool India reported better-than-expected results, while Polycab posted a profit drop. PEER COMPARISION
Valuation (next 12 months) Estimates (next 12 months) Analysts’ sentiment
RIC PE EV/EBITDA Price/Sales Revenue profit growth Mean # of Stock to Div
growth rating* analysts price yield
target** (%)
Bajaj Electricals 44.73 26.01 NULL 15.83 51.57 BUY 7 0.93 0.31
Havells India 63.02 42.76 5.02 20.44 26.67 HOLD 21 0.95 0.50
Crompton Greaves 43.55 28.33 2.77 12.88 31.62 BUY 31 0.91 0.70
Consumer Electricals
Polycab India 44.98 31.12 4.45 17.96 19.55 BUY 24 0.94 0.46
* Mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** Ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT APRIL-JUNE STOCK PERFORMANCE
— All data from LSEG
($1 = 83.9400 Indian rupees)
(Reporting by Nishit Navin; Editing by Rashmi Aich)
