(Reuters) -Indian appliances maker Bajaj Electricals reported a dip in second-quarter profit on Friday as losses from a joint venture and higher tax expenses weighed, while demand for its mainstay cooling products also faltered.
The Bajaj Group firm’s consolidated net profit declined about 24% to 98.6 million rupees ($1.12 million) in the quarter ended September 30.
It incurred losses of 47.7 million rupees related to a joint venture and a total tax expense of 56.4 million rupees. The company did not specify details.
Net sales fell 1% to 11.03 billion rupees in the quarter, led by a 4% drop in its consumer products business to 8.33 billion rupees.
Shares of the company reversed course to trade 0.6% lower after the results.
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KEY CONTEXT
Indian consumer durable firms have seen strong demand for electrical and lighting equipment as government spending on infrastructure remained strong and as the real estate sector boosted demand.
However, sales of cooling products were muted in the quarter, a trend that extended from last quarter, as a longer-than-expected monsoon dented demand.
The firm’s electrical segment contributes 75% of the sales, while lighting products account for the rest.
Apart from its cooling products – coolers and fans – it sells items including kitchen appliances, heaters and cooktops.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBI Price/ Revenue Profit Mean No. of Stock to Div
TDA Sales growth (%) growth (%) rating* analyst price yield
s target** (%)
Bajaj Electricals 32.75 14.51 NULL 8.66 42.69 Buy 10 0.77 0.57
Blue Star 55.75 36.43 NULL 15.39 21.49 Hold 20 1.07 0.45
Voltas 49.51 39.10 2.60 10.49 20.61 Hold 35 1.04 0.49
Havells India 51.12 34.42 3.77 11.80 18.25 Buy 25 0.89 0.67
* The mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JULY-SEPTEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 87.8950 Indian rupees
(Reporting by Manvi Pant)
