Bajaj Electricals, 1Q FY 2014

7/27/2019 Bajaj Electricals, 1Q FY 2014

1/14

Please refer to important disclosures at the end of this report 1

Y/E March (` cr) 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy)Net sales 783 1114 (29.7) 666 17.6EBITDA 20 13 53.1 35 (41.6)

EBITDA Margin (%) 2.6 1.2 140bp 5.2 (262)bp

Adjusted PAT 1 1 4.8 12 (94.5)Source: Company, Angel Research

Bajaj Electricals Ltd (BEL) reported a poor set of numbers for 1QFY2014, mainly

at the operating level. Its top-line reported a decent growth of 17.6% yoy to

`783cr, in line with our expectation of `764cr. The EBITDA stood at `20cr which

was lower by 41.6% yoy while margins at 2.6% were lower by 262bp yoy. Overallthe EBIT margin of the company dipped by 265bp yoy mainly on account of cost

overruns in delayed projects in the E&P segment which reported an EBIT loss of

`26cr as compared to `7cr in 1QFY2013. Net profit, on the back of sluggish

operating performance, plunged by 94.5% yoy to `0.66cr.

Increased ad spends and premium segment launches on an uptrend: BEL haselaborated its ad spends by almost 50% to `75cr in FY2014E (from `38cr in

FY2013) celebrating its 75th year, thereby increasing its visibility substantially.

This in result is expected to create consumer pull, thereby enhancing the top-line

of the company. Moreover, following the success met in in induction cookers

(sales rise from `60cr FY2011 to `150cr in FY2013), BEL has launched a fewmodels in the premium ceiling fan segment and air fryers in FY2013 and is

looking forward to enter water purification products segment.

Outlook and valuation:Amidst a poor performance for the quarter, BEL is set tohave a clean slate post 1HFY2014, ie after the recent correction in the stock price

and the significant hit it took from the cost over-runs in the E&P segment due to

delayed project closures. On the back of recent developments, we expect the top-

line and bottom-line to grow at a CAGR of 14.9% and 107.7% (due to low base)

respectively over FY2013-15E. Currently, the stock is trading at a PE of 10.4x for

FY2015E earnings. Despite improving operational performance of E&P segment,we have revised our estimates downwards and continue to maintain Buy rating onthe stock with a revised target price of `184 based on target PE of 12x for FY2015E.Key financialsY/E March (` cr) FY2012 FY2013E FY2014E FY2015ENet Sales 3,099 3,388 3,885 4,472% chg 13.0 9.3 14.7 15.1

Net Profit 118 35 67 153% chg (20.0) (69.9) 89.7 127.5

EBITDA Margin (%) 7.7 3.3 4.0 5.8FDEPS (`) 11.8 3.6 6.8 15.4

P/E (x) 13.5 45.0 23.7 10.4

P/BV (x) 2.3 2.2 2.1 1.8

RoE (%) 16.8 4.9 8.8 17.3

RoCE (%) 27.9 11.6 15.9 24.7

EV/Sales (x) 0.5 0.5 0.4 0.4

EV/EBITDA (x) 7.1 15.2 10.9 6.5

Source: Company, Angel Research; Note: CMP as of August 7, 2013

BUYCMP `160

Target Price `184

Investment Period 12 Months

Stock Info

Sector

Net Debt

Bloomberg Code

Shareholding Pattern (%)

Promoters 66.1

MF / Banks / Indian Fls 4.5

FII / NRIs / OCBs 17.6

Indian Public / Others 11.9

Abs.(%) 3m 1yr 3yr

Sensex (5.8) 8.9 3.2

BEL (11.5) (11.2) (38.5)

Nifty 5,542

Reuters Code BJEL.BO

BJE IN

52 Week High / Low

BSE Sensex 18,733

Consumer durables

Market Cap (`cr) 1,599

Beta 0.8

233/150

Avg. Daily Volume 21,582Face Value (`) 2

86.0

Twinkle Gosar+91 22 3935 7800 Ext: 6848

[email protected]

Bajaj ElectricalsE&P despair to be done post 3QFY2014

1QFY2014 Result Update | Cons. Durables

August 8, 2013


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Bajaj Electricals | 1QFY2014 Result Update

August 8, 2013 2

Exhibit 1:1QFY2014 performance highlightsY/E March (` cr) 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy) FY2013 FY2012 % chgTotal operating income 783 1114 (29.7) 666 17.6 3,388 3,099 9.3Net raw material 622 915 (32.0) 515 20.9 2,594 2,295 13.0(% of Sales) 79.4 82.1 77.3 76.6 118.6

Employee cost 40 40 1.0 35 14.3 163 140 16.4

(% of Sales) 5.1 3.6 5.3 4.8 81.1

Other Expenses 101 146 (31.0) 82 23.5 520 427 21.8

(% of Sales) 12.9 13.1 12.3 15.3 133.3

Total expenditure 763 1101 (30.6) 632 20.9 3,277 2,862 14.5EBITDA 20 13 53.1 35 (41.6) 111 237 (53.3)EBITDA Margin (%) 2.6 1.2 140bp 5.2 (262)bp 3.3 7.7 (439)bp

Interest 16 16 1.8 16 (89.0) 69 63 9.4

Depreciation 4 4 (5.6) 3 25.2 14 13 15.4

Other income 2 8 (76.7) 3 (42.2) 42 14 189.8

PBT (excl. Extr. Items) 2 1 68.6 18 (90.6) 69 176 (60.8)Extr. Income/(Expense) 0 0 0.0 15.7 0.0

PBT (incl. Extr. Items) 2 1 18 85 176(% of Sales) 0.2 0.1 2.7 2.5 5.7

Tax 1 0 171.8 6.3 (83.1) 17.8 58.1 (69.4)

(% of PBT) 61.6 38.2 34.2 21.0 33.0

Reported PAT 1 1 4.8 12 (94.5) 51 118 (56.6)Adjusted PAT 1 1 4.8 12 (94.5) 35 118 (69.9)PATM (%) 0.1 0.1 1.8 1.0 (536.8)

Source: Company, Angel Research

Revenue in-line, profits below expectation

For 1QFY2014, BEL reported a poor set of numbers. The top-line reported a

decent growth of 17.6% yoy to `783cr, in line with our expectation of `764cr. The

EBITDA stood at `20cr which was lower by 41.6% yoy while margins at 2.6% were

lower by 262bp owing to closure of delayed E&P projects having cost over-runs.

The Net profit, on back of a sluggish operating performance, plunged by 94.5%

yoy to `0.66cr as compared to our estimate of `21cr.

Exhibit 2:Net sales growth on uptrend


Exhibit 3:Declining E&P losses to reverse EBITDA margin trend


544

701

794

1,0

60

666

734

873

1,1

14

783

12.5

19.2

15.1

8.222.4

4.7

10.05.1

17.6

0

5

10

15

20

25

0

200

400

600

800

1,000

1,200

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

1QFY14

(%)

(`cr)

Revenue (LHS) Revenue growth yoy (RHS)

31

53

65

86

35

26

36

13

20

5.6

7.5 8.2 8.1

5.2

3.54.1

1.2

2.6

0

1

2

3

4

5

6

7

8

9

0

10

20

30

40

50

60

70

80

90

100

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

1QFY14

(%)

(`cr)

EBITDA (LHS) EBIT DA Margin ( RHS)


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August 8, 2013 3

Consumer durables and Lighting outperform; E&P disappoints

Revenue from the consumer durables segment grew by 11.8% yoy and came in at

`437cr (55.7% contribution to total revenue). The EBIT for the segment came in at

`40cr, 22.9% higher yoy, owing to price hikes undertaken in Jun13. The

segments EBIT margin for the quarter expanded by 83bp yoy to 9.2%.

The Lightings segment grew marginally by 3.3% yoy to `157cr and contributed

20.1% to the total revenue for the quarter. The flat growth was on account of de-

growth in the luminous segment by 1% which partially offset 6.4% growth in the

lighting segment. The EBIT for the segment rose by 4.2% yoy to `8cr and margins

expanded by a mere 4bp yoy to 4.9%.

Exhibit 4:Segment-wise performanceY/E Mar (` cr) 1QFY14 4QFY13 1QFY13 % chg (qoq) % chg (yoy)Total RevenueA) Lighting 157 285 152 (44.7) 3.3

B) Cons Durables 437 544 390 (19.7) 11.8

C) E&P 189 285 123 (33.6) 53.6

D) Others 0 0 0 (9.1) 17.6

Total 783 1,114 666 (29.7) 17.6EBIT Margin (%) (bp change)A) Lighting 4.9 7.9 4.8 (299) 4

B) Cons Durables 9.2 8.0 8.4 119 83

C) E&P (13.7) (17.8) (5.7) 409 (794)

D) Others (45.0) (0.0) (64.7) (4,498) 1,971Source: Company, Angel Research

The Engineering & Projects segments revenue posted a robust growth of 53.6%

yoy to `189cr, contributing 24.2% to the total revenue. However on the EBIT front,

owing to closure of seven old and delayed project sites in 1QFY2014, the segment

reported a loss of `26cr vis--vis EBIT loss of `7cr in the same quarter previous

year. The pinch from the E&P segment is expected to continue for the next two

quarters post which BEL will be done with its old delayed sites.

Exhibit 5:Order Book composition


Exhibit 6:Execution status and reducing EBIT losses


136

350

262

369

292257

465

618 612

536

60 75 80 4392

0

100

200

300

400

500

600

700

1QFY13 2QFY13 3QFY13 4QFY13 1QFY14

(`cr)

TLT Special Projects HMST

453

890960

1,024

920

123 133 147 285 189

7

27

40

51

26

0

10

20

30

40

50

60

0

200

400

600

800

1,000

1,200

1QFY13 2QFY13 3QFY13 4QFY13 1QFY14

(`cr)

(`cr)

Total Orders Orders executed E&P EBIT Loss


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August 8, 2013 4

Investment Rationale

Increased ad spends and premium segment launches to drive growth

BEL is set to celebrate its 75th year in July by elaborating its ad spends and newmarketing schemes. The ad spend is to rise by almost 50% to `75cr (from `38cr in

FY2013) in order to increase its visibility. The company has achieved decent

growth with limited advertisements till now, hence, with this increment, it is

expected to create consumer pull, thereby enhancing the top-line.

The product launch of induction cooker last year has been successful with sales

growing from `60cr in FY2011 to `150cr in FY2013. In addition, BEL has

launched a few ceiling fan models in the premium segment which are doing well

as of now. The Management expects these new launches to capture significant

market share in the next 6-8 months. BEL has also introduced air fryers and is

looking forward to enter the water purification products segment.

E&P segment to be on uptrend from FY2014

The E&P division contributed ~25-30% over FY2010-12 to the total revenue of the

company. However, the EBIT margin for the segment has been contracting

significantly since FY2010 from 10.7% to 3.3% in FY2012 on account of delayed

execution of projects and cost overruns. Hence, the company has made the

provision for the same in order to take a conservative stand. Moreover, the

company has become very selective in order intake by focusing more on

profitability (with double digit operating margins) rather than revenue growth. On

account of this, we expect the segment to register an EBIT loss of `65cr for

FY2014E (`124cr in FY2013) and move gradually to EBIT profit of `24cr inFY2015E.

Exhibit 7:Margin trend reversal for E&P segment


Capital employed for the E&P segment has reduced from `573cr in 3QFY2013E to

`489cr in 1QFY2014. The improvement is owing to receipt of advances from new

orders and provisions write off for FY2013E. BEL expects to generate sales at 50%

of capital employed in FY2014, thus providing better returns visibility.

737 831 832 688 709 731

10.7 8.9 3.3

(18.1)

(9.1)

3.3

(20)

(15)

(10)

(5)

0

5

10

15

0

100

200300

400

500

600

700

800

900

FY2010 FY2011 FY2012 FY2013 FY2014E FY2015E

(%)

(`cr)

E&P Revenue EBIT Margin


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August 8, 2013 5

Exhibit 8:Order book trendE&P order status FY2011 FY2012 FY2013 FY2014E FY2015EOpening order book 750 750 604 876 1,087

Order intake during year 832 688 960 920 901Executed orders 832 834 688 709 731Closing order book 750 604 876 1,087 1,256

Source: Company, Angel Research, * as on end of 2QFY2013.

Leveraging on strong brands and leading market position

BEL has a strong brand positioning and a well-spread distribution network. BEL

has collaborated with known brands in each of its segments which have enabled it

to grow at a robust pace over the years.

Exhibit 9:Strong brand associationBrand ProductsTrilux Lenze (Germany) Luminaries

Disano (Italy) Street Lights

Delta Controls (Canada) Building management systems

Rudd (US) LED

Morphy Richards (UK) appliances

Nardi (Italy) appliances

Disney (USA) Fans

Media (China) Fans

Securiton (Switzerland) Fire alarm system

Source: Company

BEL has a leading position in consumer durables, mixer, heaters, luminaries, fans

and induction cooker segment.

Exhibit 10:Leading market shareSegment Market size* Market share^Electrical Appliances `6000cr 15.0%

Fans `2000cr 16.5%

Lighting `3600cr 17.0%

Luminaries `2500cr -

Source: Company, *including organised and un-organised sector, ^in organised sector.

Recent alliance: The companys association with Glass Line Technology, Noida forin-house manufacturing of water heaters will substitute the current imports from

China and hence boost the operating margins of the company. In the water heater

segment, BEL is poised to excel in volumes since the technology used by BEL is far

better and advanced than its other two peers in this segment. Technology will be a

key driver of revenue for this segment.


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August 8, 2013 6

Penetration in rural market through exclusive Bajaj world stores

BEL plans to capitalize on growth in rural markets (dominated by unorganized

players) by penetrating them through its outlets Bajaj World opened mainly

through the franchise route displaying all the products of BEL. With growing

disposable incomes, rural India is poised to witness growth in electrical appliances.

BEL has already opened ~30 stores pan-India and targets 100 stores by the next

year, of which ~50 stores are to be opened in the rural market.

In addition, the company has plans to launch rural-specific brands to tap price

sensitive segments under the Bajaj umbrella. Products under this economy brand

will have different finish, designs and will be priced much lower than existing

products of BEL. With expansion of the customer base, and fresh demand coming

in, the top-line of the company assures decent growth visibility.

Exhibit 11:Segmental Contribution

Source: Company

ElectricalAppliances

36%

Engineering &Projects

20%

Lighting15%

Luminories11%

Fans18%

FY2013


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August 8, 2013 7

Financials

Exhibit 12:Key AssumptionsSales Growth (%) FY2012 FY2013 FY2014E FY2015E CAGR (FY2013-15E)Electrical Appliances 24.7 28.5 12.6 17.8 15.2

Fans 6.5 12.2 27.8 17.8 22.7

Lighting 28.7 21.5 (1.3) 17.8 7.8

Luminaries 13.5 2.3 43.2 17.8 29.9

Engineering & Projects 0.1 (17.3) 3.1 3.0 3.0

Total Sales Growth 13.2 9.0 14.7 15.1 14.9Source: Company, Angel Research

Exhibit 13:Change in EstimatesY/E March Earlier estimates Revised estimates % change

FY2014E FY2015E FY2014E FY2015E FY2014E FY2015ENet Sales (`cr) 3,885 4,472 3,885 4,472 (0.0) 0.0EBITDA Margin (%) 5.4 7.2 4.0 5.8 (145)bp (143)bp

EPS (`) 11 20 7 15 (38.4) (22.5)Source: Company, Angel Research

Net sales to post CAGR of 14.9% over FY2013-15E

The top-line of the company is expected to post a 14.9% CAGR over FY2013-15E

to `4,472cr backed by strong performance from the consumer durables and

revival in the E&P segment. We expect a 10.0% volume growth and a 5.0% value

growth over FY2013-15E. To combat the escalating inflation levels and commodityprices, the company continues to increase the price of its products across

segments.

Exhibit 14:Net sales growth to normalise


EBITDA to grow at 52.7% CAGR over FY2013-15E

BELs EBITDA is expected to grow at 52.7% CAGR over FY2013-15E to `258cr inFY2015E. Moreover, EBITDA margins are believed to improve from 3.3% in

FY2013 (dragged by E&P segment) to 5.8% in FY2015E. Recovery in E&P segment

2,7

41

3,0

99

3,3

86

3,8

85

4,4

72

23.013.0 9.3

14.7

15.1

0

5

10

15

20

25

-

1,000

2,000

3,000

4,000

5,000

FY2011 FY2012 FY2013 FY2014E FY2015E

(%)

(`

cr)

Net sales (LHS) Net sales growth (RHS)


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August 8, 2013 8

with fresh orders being bagged at healthy margins coupled with stability in

currency is expected to aid the EBITDA margin rebound.

Exhibit 15:EBITDA margins to revive with E&P turnaround


Notable PAT growth due to robust top-line and improving EBITDA

On the back of strong top-line coupled with improvement in E&P divisions

operating performance, we expect the bottom-line to post a CAGR of 107.3% over

FY2013-15E to `152cr with margin improving from 1.0% in FY2013 to 3.4% in

FY2015E.

Exhibit 16:PAT trend reversal


250 237 111 154 258

9.1

7.7

3.3

4.0

5.8

0

1

2

3

4

5

6

7

8

9

10

0

50

100

150

200

250

300

FY2011 FY2012 FY2013 FY2014E FY2015E

(%)

(`

cr)

EBITDA (LHS) EBITDA margin (RHS)

147 118 35 67 152

5.4

3.8

1.0

1.7

3.4

0

1

2

3

4

5

6

0

20

40

60

80

100

120

140

160

180

FY2011 FY2012 FY2013 FY2014E FY2015E

(%)

(`

cr)

PAT (LHS) PAT margin (RHS)


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August 8, 2013 9

Outlook and valuation

Amidst poor performance for the quarter, BEL is set to have a clean slate post

1HFY2014 after the stock correction and significant hit from the cost over-runs in

the E&P segments delayed projects closure. On the back of recent developments,

we expect the top-line and bottom-line to grow at a CAGR of 14.9% and 107.7%

(due to low base) respectively over FY2013-15E. Post the recent correction, the

stock is available at an attractive PE of 10.4x for FY2015E earnings. Despiteimproving operational performance of E&P segment, we have revised ourestimates downwards and continue to maintain our Buy rating on the stock with arevised target price of `184, based on target PE of 12x for FY2015E.Exhibit 17:One year forward PE


Concerns

Currency fluctuation: BEL has a substantial part of its products imported fromvarious associate foreign brands which pose a risk of currency fluctuations,

thereby impacting profitability of the company.

Change in LPG cap policy reform:Any increment in availability of subsidizedLPG cylinder which is capped to 6 per family per annum will impact the

volume of induction cookers.

Inflation: Inflationary pressure would resist volume pick up. Delay in E&P project execution.Exhibit 18:Relative ValuationCompany Sales OPM PAT EPS ROIC P/E P/BV EV/EBITDA EV/Sales(` cr) (%) (` cr) (`) (%) (x) (x) (x) (x)BEL* 3,388 3.3 51 3.6 11.6 45.0 2.2 15.2 0.5

Surya Roshni* 3,041 8.0 72 16.3 12.9 3.9 0.4 4.0 0.3

IFB Inds.^ 908 5.3 32 7.8 10.4 5.5 0.5 3.2 0.2

Source: Capital Line, *TTM ended Jun13 quarter, ^TTM ended Mar13 quarter.

0

50

100

150

200

250

300

350

400

Feb-

08

Aug-

08

Feb-

09

Aug-

09

Feb-

10

Aug-

10

Feb-

11

Aug-

11

Feb-

12

Aug-

12

Feb-

13

Aug-

13

(`)

Price 3x 10x 17x 24x


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August 8, 2013 10

Profit and loss statement

Y/E March (` cr) FY2011 FY2012 FY2013 FY2014E FY2015EGross sales 2,765 3,130 3,413 3,913 4,505

Less: Excise duty 24 31 25 29 33Net Sales 2,741 3,099 3,388 3,885 4,472

Other operating income - - - - -Total operating income 2,741 3,099 3,388 3,885 4,472% chg 23.0 13.0 9.3 14.7 15.1

Net Raw Materials 2,036 2,295 2,594 3,076 3,512

% chg 26.2 12.7 13.0 18.6 14.2

Other Mfg costs 78 94 97 80 67

% chg 28.0 20.1 3.7 (18.1) (15.8)

Personnel 114 140 163 187 210

% chg 28.9 22.8 16.4 14.7 12.4

Other 263 340 426 388 425

% chg 15.1 29.1 25.2 (8.7) 9.4

Total Expenditure 2,491 2,862 3,277 3,731 4,214

EBITDA 250 237 111 154 258% chg 5.4 (5.1) (53.3) 38.8 68.0

EBITDA Margin 9.1 7.7 3.3 4.0 5.8

Depreciation & Amortisation 11 13 14 16 17

EBIT 239 225 96 138 241% chg 4.9 (6.1) (57.1) 43.1 74.7

(% of Net Sales) 8.7 7.2 2.8 3.5 5.4

Interest & other Charges 37 63 69 67 57

Other Income 16 14 42 29 44

(% of Net Sales) 0.6 0.5 1.2 0.8 1.0

Recurring PBT 203 162 27 71 184% chg 6.1 (20.2) (83.1) 161 158

PBT (reported) 219 176 69 100 228Tax 75 58 18 33 75

(% of PBT) 34.2 33.0 25.8 33.0 33.0

PAT (reported) 144 118 51 67 153Extraordinary Expense/(Inc.) (4) 0 16 - -

ADJ. PAT 147 118 35 67 153% chg 22.1 (20.0) (69.9) 89.7 127.5

(% of Net Sales) 5.4 3.8 1.0 1.7 3.4

Basic EPS (`) 14.9 11.8 3.6 6.8 15.4Fully Diluted EPS ( ) 14.9 11.8 3.6 6.8 15.4


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August 8, 2013 11

Balance sheet

Y/E March (` cr) FY2011 FY2012 FY2013 FY2014E FY2015ESOURCES OF FUNDSEquity Share Capital 20 20 20 20 20Reserves& Surplus 591 680 709 743 864

Shareholders Funds 611 700 728 763 884Minority Interest - - - - -Total Loans 112 187 166 160 136

Long term Provisions 16 19 25 25 25

Net Deferred Tax Liability (2.0) (1.9) (7.9) (7.9) (7.9)

Total Liabilities 737 904 911 940 1,037APPLICATION OF FUNDSGross Block 230 272 332 365 402

Less: Acc. Depreciation 74 85 100 116 133

less: impairment of assets 3 3 - - -

Net Block 153 184 232 250 269Capital Work-in-Progress - 3 - - -

Goodwill - - - - -

Investments 37 44 30 33 36

Long Term Loans and adv. 97 109 73 73 73

Other non-current assets 154 186 265 253 268

Current Assets 1,322 1,423 1,550 1,742 1,983Cash 48 54 50 41 25

Loans & Advances 68 92 141 155 179

Inventory 295 355 421 470 541

Debtors 911 922 938 1,076 1,238

Current liabilities 1,026 1,045 1,238 1,410 1,592

Net Current Assets 296 378 312 333 391Mis. Exp. not written off - - - - -

Total Assets 737 904 911 940 1,037


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August 8, 2013 12

Cash flow statement

Y/E March (` cr) FY2011 FY2012 FY2013 FY2014E FY2015EProfit before tax 219 176 69 100 228

Depreciation 11 13 14 16 17(Inc.)/ Dec. in Working Capital (16) (14) (42) (29) (44)

Less: Other income 199 (77) 78 (30) (75)

Direct taxes paid (75) (58) (18) (33) (75)

Cash Flow from Operations 337 39 102 24 51(Inc.)/ Dec. in Fixed Assets (214) (77) (136) (21) (52)

(Inc.)/ Dec. in Investments (97) (19) 51 (3) (3)

Other income 16 14 42 29 44

Cash Flow from Investing (296) (82) (43) 5 (11)Issue of Equity 0 0 0 0 0

Inc./(Dec.) in loans (25) 79 (22) (6) (24)

Dividend Paid (Incl. Tax) (28) (28) (24) (32) (32)

Others (18) (3) (16) - -Cash Flow from Financing (70) 48 (63) (38) (56)Inc./(Dec.) in Cash (29) 5 (4) (9) (16)

Opening Cash balances 77 48 54 50 41Closing Cash balances 48 54 50 41 25


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August 8, 2013 13

Key ratios

Y/E March FY2011 FY2012 FY2013 FY2014E FY2015EValuation Ratio (x)P/E (on FDEPS) 10.8 13.5 45.0 23.7 10.4P/CEPS 10.1 12.2 32.0 19.2 9.4

P/BV 2.6 2.3 2.2 2.1 1.8

Dividend yield (%) 1.7 1.7 1.5 2.0 2.0

EV/Sales 0.6 0.5 0.5 0.4 0.4

EV/EBITDA 6.5 7.1 15.2 10.9 6.5

EV / Total Assets 2.2 1.9 1.8 1.8 1.6

Per Share Data (`)EPS (Basic) 14.9 11.8 3.6 6.8 15.4

EPS (fully diluted) 14.9 11.8 3.6 6.8 15.4

Cash EPS 15.9 13.1 5.0 8.3 17.1

DPS 2.8 2.8 2.8 2.8 2.8

Book Value 61.3 70.2 73.1 76.6 88.7

Dupont AnalysisEBIT margin 8.7 7.2 2.8 3.5 5.4

Tax retention ratio 0.7 0.7 0.7 0.7 0.7

Asset turnover (x) 4.2 3.9 4.1 4.5 4.6

ROIC (Post-tax) 24.1 18.7 8.6 10.7 16.5

Cost of Debt (Post Tax) 21.5 22.6 30.9 27.9 27.9

Leverage (x) 0.0 0.1 0.1 0.1 0.1

Operating ROE 24.2 18.2 6.0 8.7 15.6

Returns (%)ROCE (Pre-tax) 32.4 24.8 10.6 14.7 23.2

Angel ROIC (Pre-tax) 36.7 27.9 11.6 15.9 24.7

ROE 24.1 16.8 4.9 8.8 17.3

Turnover ratios (x)Asset Turnover (Gross Block) 4.3 11.4 10.2 10.6 11.1

Inventory / Sales (days) 34 38 49 47 47

Receivables (days) 111 109 109 109 109

Payables (days) 126 121 121 121 121

WC cycle (ex-cash) (days) 46 46 28 27 30

Solvency ratios (x)Net debt to equity 0.0 0.1 0.1 0.1 0.1

Net debt to EBITDA 0.1 0.4 0.8 0.6 0.3

Interest Coverage (EBIT / Int.) 6.5 3.6 1.4 2.1 4.3


14/14


Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

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Angel Broking Pvt. Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, makeinvestment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in thisdocument are those of the analyst, and the company may or may not subscribe to all the views expressed within.

Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions andtrading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company'sfundamentals.

The information in this document has been printed on the basis of publicly available information, internal data and other reliablesources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as thisdocument is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any wayresponsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannottestify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.While Angel Broking Pvt. Limited endeavours to update on a reasonable basis the information discussed in this material, there may beregulatory, compliance, or other reasons that prevent us from doing so.

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or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report orin the past.

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Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to thelatest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates mayhave investment positions in the stocks recommended in this report.

Disclosure of Interest Statement Bajaj Electricals

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)

Note: We have not considered any Exposure below`

1 lakh for Angel, its Group companies and Directors

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Bajaj Electricals, 1Q FY 2014

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