Bajaj Electricals (BJE IN) – Q3FY26 Result Update – Weak quarter with normalization in inventory – Downgrade to ‘Accumulate’
Published on 09 Feb 2026
We downward revise our FY27/28 earnings estimate by 17%/11% with contraction in volume and margin due to increase in commodity prices, and downgrade the rating to ‘Accumulate’. Consumer Products (CP) segment declined 25.2% YoY, driven by de-growth across categories due to channel stock normalization; water heaters, however, reported flattish growth. GP margin contracted by 80bps YoY, due to lower volume across high-margin categories and CP EBIT margin contracted due to lower volumes and operating deleverage. Lighting business momentum remains strong, supported by expansion into adjacent categories such as switchgear, solar products, and wires, leveraging brand strength and distribution reach. BJE has implemented a price hike of 2-5% effective from Feb’26 to offset commodity inflation. BJE expects CP EBIT margin recovery to be driven by cost efficiency measures. Channel inventory days have reduced by ~30%. We estimate FY25-28E revenue/EBITDA/PAT CAGR of 7.4%/11.6%/15.2%. We value the stock at 25x Mar’28 EPS (earlier 30x) and arrive at TP of Rs449 (earlier Rs597). Downgrade to ‘Accumulate’.
