Bajaj Electricals (BJE IN) – Q2FY26 Result Update – CP weakness persists, outlook remains cautious – BUY
Published on 03 Nov 2025
CP segment decline by 4.1% YoY (accounted for 75.2% revenue), driven by double digit decline in TPW fans and air coolers, however ceiling fans grew in double-digit with double-digit value growth in kitchen appliances. GP margin expanded by 140bps YoY, driven by VAVE initiatives and outsourcing efficiencies, and is expected to improve further. Lighting revenue grew 9.6%, driven by double-digit value growth in consumer lighting. CP EBIT margin expanded due to operating leverage and better product mix. BJE’s entry into the switchgear business in Aug’25 has received a positive response from channel partners and is not expected to dilute lighting segment margins. BJE is planning to implement a price hike of ~1–3% in fans by Q3FY26. BJE expects a saving in substantial royalty costs due to acquisition of ‘Morphy Richards’ brand. High channel inventory still persists, indicating a cautious outlook on near-term. We estimate FY25-28E revenue/EBITDA/PAT CAGR of 11.0%/16.4%/21.4%. We value stock at 30x Sep’27 EPS (earlier 35x) and arrive at TP of Rs600 (earlier Rs664). Maintain ‘BUY’.
