Analysis is being undertaken here wrt Bajaj Electricals - Q4 FY20 (Audited –Cons) in wake of Coronavirus hit quarter and thus one can not make correct assumptions based on this qtr result.
CMP: 412
Total revenue from operations 1,307 Cr
1,775 Cr (-26.21%) YoY | 1,283 Cr (1.85%) QoQ
Year ending revenue: 4,987 Cr Vs. 6,679 Cr (-25.34%)
Net Profit of (0.81) Cr
23.08 Cr (-103.32%) YoY 9.37 Cr (-108.39%) QoQ
Year ending Net profit: (10.28) Cr Vs. 153.4 Cr (-106.71%)
EPS (in Rs.) (0.08)
2.23 YoY | 0.90 QoQ
Year ending EPS: (0.99) Vs. 14.83
View: Result is declined and below expectation. YoY revenue significantly
declined and company also posted losses also in this quarter. FY20 Company
also posted losses in this quarter.
Business Updates & Highlights:
Q4FY20 EBITDA is around INR 40.1 Cr Vs. 65.1 Cr in Q4FY19 Vs. 67.2 Cr in
Q3FY20 therefore declined by 38.4% in YoY and declined by 40.2% in QoQ.
EBITDA margin is around 3.1% Vs. 3.6% Vs. 5.2%.
FY20 EBITDA is around INR 208 Cr Vs. 340 Cr in FY19 therefore declined by
38.9% in YoY. EBITDA margin is around 4.1% Vs. 5.1% in FY19.
Company is primarily into two operating segment viz. Consumer Products –
57% and EPC – 42%. YoY topline growth for Consumer Product – (0,40%) and
EPC – (46.3%). YoY bottom line growth for Consumer Product – 38.9% and EPC
– (153%).
The order book as on 1st April, 2020 stands at Rs. 1,730 Cr., comprising of
Rs. 705 Cr. for Transmission Line Towers, Rs. 828 Cr. for Power
Distribution, and Rs. 197 Cr. for Illumination Projects.
Financial
ROE and ROCE is around INR 17% and 18% respectively and book value per
share is around INR 88 and share is currently trading at 4.7x of its book
value. Promoter holding is around 63.1% in the company which is strong and
stable. FIIs and mutual funds hold around 7.9% and 11.4% in the company.
Cash and cash equivalent from operating activities as of March 2020 is
around INR 626 Cr Vs. (620) Cr as of March 2019. The good thing is Debt to
Equity ratio from 1.5 (as on 31st March, 2019) to 0.7 (as on 31st March,
2020.
Position: Share support price is INR 350. Long term investor based on their
risk appetite can continue with the company. Short term outlook is
bearish.
Share View: Share price high 535 (52 week) and now 411. Bajaj Electricals
Ltd is an Indian consumer electrical equipment manufacturing company based
in Mumbai, Maharashtra. It has diversified with interests in lighting,
luminaries, appliances, fans, LPG based Generators, engineering and
projects
Opportunities: Positive cash flows from operations and overall reducing the
debt burden and down the debt equity ratio in FY20. Strong dealership
network in all over country.
Risk: Negative growth despite Covid – 19 outbreak was in last week of March
2020. Significantly impacted topline and also posted losses. Q1FY21 may
equally challengeable due to lockdown extension and new business
acquisition risk.
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