Comments
Target: ₹1,200
CMP: ₹1,063.45
We initiate coverage on Bajaj Electricals with a Buy rating and target price of ₹1,200. We believe BJE is a play on the growth opportunity in FMEG and anticipated rural recovery, given its diverse product offerings along with a leadership position within key categories in home and kitchen appliances; its well-entrenched distribution network; and its higher rural saliency vs peers (c.2x of peers).
After turning net cash (after four decades) and simplifying its corporate structure under Phase 1 of its transformation journey, in its next phase, BJE is focused on industry-leading growth and aims to achieve it through refreshing the product portfolio; offering products across the consumer value chain via a multi-brand strategy; and stepping up investments in branding and innovation.
We expect BJE’s revenue/EBITDA/PAT to grow at a CAGR of 14/38/47 per cent over FY24-27. At CMP, BJE trades at 28x FY27 EPS (10-40 per cent discount to peers). Notwithstanding the near-term softness in demand (barring summer portfolio), we believe BJE is well-placed to gain from the much-anticipated improvement in demand (especially from H2FY25) along with margin expansion, led by presence across small ticket daily use products and cost efficiency measures along with higher operating leverage.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.