Bajaj Electrical Company Report 29.02.08

Angel Broking
TM
Bajaj Electricals
Service Truly Personalized Initiating Coverage / India Research
BUY ‘Luminous Prospects’

We believe a large addressable market opportunity, scalable business model, strong
Price Rs490
'customer connect', and committed promoters, makes Bajaj Electricals (BEL) a strong
Target Price Rs639
contender in the Domestic Appliances arena. Our recent interaction with the management
Investment Period 12 Months re-affirmed our view that BEL is embarked on high-growth path. We expect the company to
record a strong CAGR Sales and Net Profit growth of 22% and 33.6% over FY2007-10E,
Stock Info respectively. At Rs490, the stock is trading at attractive valuations of 9.2x FY2010E
Sector Consumer Durable Earnings and FY2010E EV/Sales of 0.5x. In comparison, peer Havells is trading at 14x
Market Cap (Rs cr) 847 FY2010E Earnings and FY2010E EV/EBITDA of 10.3x. We Initiate Coverage on the stock,
with a Buy recommendation and Target Price of Rs639. At the Target Price the stock
Beta 0.51
would quote at 12x FY2010E Earnings.
52 Week High / Low 740/189
Leveraging on strong Brands and substantial Marketshare: BEL has strong brand
Avg Daily Volume 8318
positioning and well-spread distribution network. As per the company's internal estimates, it
Face Value (Rs) 10 is the fastest growing player in the Rs4,400cr Domestic Appliances market, which is
growing at 20% pa. In the Small Appliances market, BEL enjoys a marketshare of over
BSE Sensex 17,579
15-30% across products.
Nifty 5,224
Focus on high-Margin E&P Division: Post a shift in Revenue mix, BEL has been
BSE Code 500031 focusing on the high-Margin E&P Division. The E&P Division enjoys high Margins of 12-13%
NSE Code BAJAJELEC compared to overall margins of 8%. In FY2005, E&P contributed 14.8% (Rs99.5cr) of BEL's
Reuters Code BJEL.BO Gross Sales, which grew to 29.6% (Rs330cr) in FY2007. By FY2010E, we expect E&P to
Bloomberg Code BJE IN contribute 32.7% (Rs658cr) of Gross Sales. We expect the E&P Division to clock 12% EBIT
Margins in FY2008-10E contributing 44.5% of total EBIT. We expect EBDITA Margins to
Shareholding Pattern (%) sustain at current levels with a positive bias.
Promoters 67.4 Future growth drivers - Overseas markets, acquisitions, newer verticals : BEL
MF / Banks / Indian FIs 10.1 plans to enhance its presence in UAE with a focus on the Lighting and Fans Segment. It
FII / NRIs / OCBs 8.8 proposes to diversify its business in different geographies. BEL has also set aside Rs100cr
Indian Public / Others 13.7 for brand acquisitions across businesses. The company also plans to foray into newer
verticals like inverters and water dispensers, which is a big and rapidly growing market.
Abs. 3m 1yr 3yr
Key Financials
Sensex (%) (7) 36 163
Y/E March (Rs cr) FY2007 FY2008E FY2009E FY2010E
BEL (%) 21 118 392 Net Sales 1,085.2 1,329.5 1,604.1 1,969.1
3m 1yr 3yr % chg 27.8 22.5 20.7 22.8
Net Profits 38.6 58.2 72.2 92.0
Rel.to Sen. (%) 29 82 229
% chg 29.4 50.7 24.0 27.5
OPM (%) 8.0 9.2 9.3 9.4
Girish Solanki
EPS (Rs) 44.6 33.7 41.8 53.2
Tel: 022 - 4040 3800 Ext: 319 P/E (x) 11.0 14.6 11.7 9.2
E-mail:girish.solanki@angeltrade.com P/BV (x) 3.6 5.4 4.0 2.9
RoE (%) 33.1 37.2 33.9 31.8
Reena Walia
RoCE (%) 21.9 25.6 25.8 26.5
Tel: 022 - 4040 3800 Ext: 331 EV/Sales (x) 1.0 0.8 0.7 0.5
E-mail:reena.walia@angeltrade.com EV/EBITDA (x) 12.2 8.6 7.1 5.7
Source: Company, Angel Research
January 30,
February 29,2008
2008 For Private Circulation Only - Sebi Registration No : INB 010996539 1
Angle Broking
TM
Bajaj Electricals
Service Truly Personalized India Research
Company Background
Gearing up to become a Bajaj Electricals (BEL), a part of the Bajaj Group, is a 70-year old diversified company having five
Rs2,001cr company by 2010 major strategic business units (SBUs) viz., Home Appliances, Lighting, Luminaries, Fans and
Engineering & Projects. In FY2007, BEL surpassed its mission of "Operation Triumph 1001" by
clocking a turnover of Rs1,114cr. Going ahead, BEL is gearing up and plans to become a Rs2,001cr
company by 2010.
BEL has two manufacturing units wherein its Chakan facility manufactures fans while the
Ranjangaon, Pune unit manufactures galvanised materials. The company is also into the
manufacture, erection and commissioning of Transmission Line Towers, Telecom Towers, Mobile
Telecom Towers and Wind Energy Towers. It has its own design centre and laboratory for its
Lighting, Consumer Durable and Fan Divisions that enables the company to conduct full-fledged
R&D for product development.
BEL has a strong pan-India The company has a strong pan-India marketing and distribution network comprising 19 branch
marketing and distribution offices, 600 distributors, 5,000 authorised dealers, more than 1,25,000 retail outlets and over 230
network service franchises.
Group company, Bajaj International Pvt. Ltd, oversees all exports of BEL except the products of its
Engineering and Projects Unit.
Exhibit 1: Business Overview
Source: Company, Angel Research, Note: Overall Gross Sales also includes other items
February
January 30,
29,2008
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Home Appliances Division
Consumer preference is Currently, the domestic Home Appliances Segment is growing at around 20% on the back of rapid
shifting to branded products urbanisation and improving purchasing power of the Indian consumers. Further, consumer
from the unbranded and preference is shifting to branded products from the unbranded and low-quality home appliances.
low-quality home appliances Hence, share of the organised sector in the Home Appliances industry is set to improve
going ahead.
In the Home Appliances Segment, BEL is one of the fastest growing players and enjoys strong
brand recognition. It is well entrenched in the Segment on account of having a strong distribution
network of more than 1,25,000 Retail outlets. As per the company’s internal estimates, the
domestic Home Appliances market stands at around Rs4,400cr and 65% of it is in the
organised segment.
BEL has a strong distribution BEL is the largest player in the Small Appliances market, with a marketshare of more than
network of more than 1,25,000 15-30% in a range of products. BEL’s products include irons, ovens, toasters, grinders (OTG),
Retail outlets water heaters, room heaters, microwave ovens, food processors, etc. The company’s
competitors in this segment include Philips, Kenstar, Usha, Maharaja, Marloni, Sumeet and BPL,
among others.
Exhibit 2: Home Appliances Segment - Product-wise marketshare

Products Marketshare (%)
Iron 20
OTG 30
Mixer 20
Water Heater 20
BEL has secured its sourcing requirements with some dedicated vendors situated at Noida, Delhi,
Himachal Pradesh apart from importing from China.
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Exhibit 3: Home Appliances - Marketshare Home Appliances - Sales growth
27.4 % CAGR
The company's Home Appliance Division recorded a CAGR growth of 27.4% over
FY2003-2007 from Rs99cr to Rs260cr.
Fans Division
Booming Housing and As per BEL’s internal estimates, the Rs1,850cr domestic Fans Industry is currently growing at
Construction Industries have around 14%. Booming Housing and Construction Industries have been the main growth drivers
been driving the Fans Segment for the Fans Segment wherein the organised sector accounts for 60-65% of the demand.
BEL enjoys a marketshare of 14% in the Domestic Fans Industry and has a leadership position in
the Premium segment. It manufactures different types of fans including ceiling, table,
pedestal, wall mounting and exhaust fans. The company sells Magnifique under the Premium
decorative category. It’s competitors in the segment include Crompton, Usha, Orient, Khaitan,
Polar and Havells. It has also tied-up with Midea, the world’s largest fan company for further
technical advancement. BEL expects the prices of fans to decline in the future, indicating that
sales in the unorganised segment would shift to the organised segment, which would benefit
companies like itself. Further, BEL has premium products in this segment which would cushion
any price decline.
BEL's Fans Division has grown at a CAGR of 21.5% over FY2003-2007 from Rs85cr to Rs185cr,
respectively.
February
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Exhibit 4: Fans Industry - Marketshare Fans Division - Sales growth

21.5% CAGR
Lighting Division
BEL’s Lighting products are As per BEL’s internal estimates, the Rs2,550cr Indian Lighting Segment constitutes 70-75% of
only next to Philips in terms of organised players. The CFL Segment constitutes 85% of organised players.
product pricing and brand
equity The company’s Lighting products are only next to Philips in terms of product pricing and brand
equity. BEL manufactures products like GLS lamps, fluorescent tube lights (FTL), compact
fluorescent lamps (CFL), miniature lamps, domestic luminaries and ballasts & starters. BEL holds
10% marketshare in GLS, 7% in FTL and 6% in CFL. The company’s competitors in this Segment
include Philips, Crompton, Surya, Wipro, Osram and Havells.
Exhibit 5: Lighting and CFL Business - Marketshare
January 30,
February 29,2008
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BEL is promoting its products BEL plans to expand its network and enhance its focus on the kiranas, malls and retail outlets. To
to the builders, realty market its products on a larger scale, the company is promoting its products to the builders, realty
companies and utilities companies and utilities. BEL is also encouraging consumers to shift to energy saving lamps.
BEL’s Lighting Division has grown at a CAGR of 9.5% over FY2003-2007 from Rs93cr to Rs134cr.
Exhibit 6: Lighting Division - Sales growth

9.5% CAGR
Luminaire Division
BEL is a market leader in street As per BEL’s internal estimates, the Rs1,000cr domestic Luminaire industry is growing at 15% pa.
lights, flood lights and The organised sector contributes 60% of total sales of the Segment. Factors driving growth in this
industrial applications industry are the upcoming Retail formats, IT parks, malls, showrooms, rapid urbanisation and
luminaires huge spending on infrastructure by the government.
BEL sells products like industrial, commercial, decorative, street light, flood light, light emitting
diodes (LED), lighting electronic (LE) and lighting control (LC) under its Luminaire Segment. These
products are next only to the products of Philips in terms of pricing and brand. BEL is a market
leader in street lights, flood lights and industrial applications luminaires. It’s competitors in this
business include Philips, Crompton and Wipro.
BEL supplies luminaires to industrial and government clients like Tisco, Telco, TEC, Reliance
Group of Industries, L&T, Aditya Birla Group, Concor, State Electricity Boards (SEBs), BSES,
BEST, etc.
February
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BEL has technical tie-ups with Trilux Lenze of Germany for premium technical lighting and with
Helvar of UK for lighting controls and ballasts. The company’s future plans in this Segment entails
focusing on new segments like IT, BPO, Retail and Healthcare and to promote its products to
builders and architects. The company plans to introduce new products with LED light source and
to develop designer street lights.
Exhibit 7: Luminaire Division - Marketshare Luminaire Division - Sales growth
24.1% CAGR
The company’s Luminaire Division has grown at a CAGR of 24.1% over FY2003-2007 from Rs81cr
to Rs193cr.
Engineering and Projects (E&P) Division
BEL is a leader in Sports BEL’s E&P business is divided into three Divisions viz., Special Projects, High Masts and Poles
lighting projects and Power and Towers.
Plant lighting in which it holds
70% marketshare Special Projects
Major growth drivers for this business includes electricity connection to 80cr households in 1,25,000
villages over the next five years, development of 25 non-metro airports, construction of IT parks,
shopping malls, BPOs and a number of sport events expected to be held at the national and
international levels. Under this Division, BEL undertakes projects such as turnkey lighting, airport
lighting, sports lighting, and rural electrification.
As per BEL’s internal estimates, it is a leader in Sports lighting projects and Power Plant lighting in
which it holds around 70% marketshare. Its major clients include NTPC, Bhel, SEBs and AAI. It
has also entered into a technical arrangement with Abacus, UK for sports lighting. India is
currently in the phase of setting up new power plants. Hence, demand for BEL’s Special Projects
is likely to improve going ahead.
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In the High Masts and Poles High Masts and Poles

Segment, it commands a
marketshare of 65% BEL designs, supplies, erects and commissions high masts, signages and street light poles. As
per it’s internal estimates, in the High Masts and Poles Segment, the company commands a
marketshare of 65%.
BEL’s major customers in this Segment include the Reliance group, L&T, Siemens, HPCL, BPCL,
Municipal Corporations, ports, etc. The company has undertaken major projects in this Segment
viz., high masts and lighting for RIL’s Jamnagar plant, signages for HPCL and RIL and street
lighting for CIDCO Mumbai, NH-45 Tamil Nadu and Mumbai. etc. It’s competitors in this business
are Philips, Crompton and BP Projects. Also, the Jawaharlal Nehru National Urban Renewal
Mission is expected to garner investments to the tune of Rs40,000cr, which augurs well for BEL.
Towers
BEL also designs, supplies, erects and commissions transmission lines, telecommunication
towers and monopoles. It has worked on projects for PGCIL, BHEL, GTL, Tata Teleservices, etc.
There are expectations of an addition of 60,000CKM transmission network by FY2012. An
investment of Rs2,00,000cr is expected to increase the capacity to transfer power from the
current 9,000MW to 30,000MW by FY2012.
Exhibit 8: Key projects executed till date

Major Projects Amount (Rs cr)
PGCIL - Almati 43
SPIC/PGCIL - Vindhyachal 20
BHEL - Vindhyachal 10
GTL 18
AP - Transco 21
SPIC/PGCIL - Vindhyachal 13
Tata Teleservices 11
Source: Company
BELs’ order book position, as on October 2007, stood at Rs200cr to be executed over the next
8-12months.
February
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Investment Argument
Leveraging on Strong Distribution Network, brands and marketshare
BEL enjoys a dominant BEL has a strong network having 19 branch offices, a chain of 600 distributors, 5000 authorised
marketshare of over 15-30% in dealers, over 125,000 retail outlets and over 230 service centers spread across the country. The
various categories company enjoys strong brand positioning in various products. BEL’s strong brand value and
positioning in the Indian market has enabled it to maintain its appeal for electronic appliances
against stiff competition from international brands and products.
As per the company’s internal estimates, suggests that it is the fastest growing player in the
Rs4,400cr domestic appliances market which is growing at 20% pa., In the Small Appliances
market, BEL enjoys a dominant marketshare of over 15-30% in various categories. The
company, as per its estimates, enjoys a marketshare of 14% in the Rs1,850cr Fans Segment
which is growing at 14% pa. The Rs2,550cr Lighting Segment, which is growing at 15% pa., it
enjoys a marketshare of 6%. Given its dominant position in these areas, the company seems well
set to leverage on the strong growth expected going ahead.
Shift in revenue mix with focus on high-Margin E&P Division
By FY2010E, we expect the E&P Post a shift in Revenue mix, BEL has been focusing on the high-Margin engineering and
Segment to contribute 32.7% projects (E&P) Segment. In FY2005, the E&P Segment contributed 14.8% (Rs99.5cr) of BEL’s
(Rs658cr) of the company’s Gross Sales, which in FY2007 grew to 29.6% (Rs330cr). Going ahead, by FY2010E, we expect
Gross Sales this Segment to contribute 32.7% (Rs658cr) of its Gross Sales. The shift in Revenue mix is also
expected to drive the company’s overall Margins going ahead as E&P enjoys high Margins of
12-13%. We expect the E&P Segment to clock 12% EBIT Margins in FY2008-10E contributing
nearly 44.5% of total EBIT. As of October 2007, BEL’s order book stood at Rs200cr to be
executed over the next 8-12 months.
Exhibit 9: Order Book - Break-up

Transmission Line Towers Rs 100cr
Special Projects Rs50cr
High Mast Poles Rs50cr
Source: Company
BEL is also aggressive in the Rural Electrification Segment and expects to reap the benefits of
reforms in the Indian Power Sector. The company has bagged an order worth Rs53cr to electrify
40,000 families below the poverty line. On account of the above, we expect EBDITA Margins to
sustain at current levels with a positive bias.
January 30,
February 29,2008
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Future growth drivers – Overseas markets, acquisitions, newer verticals
The company has acquired 32% BEL has an office in Sharjah and is looking at enhancing its presence in this market with a focus
stake in Starlite Lighting on the Lighting and Fans Segment. The company is targeting to cater to stadium lighting in UAE
along with plans to put up a ceiling fan assembly unit in the region. It is also focusing on
institutional sales in this market. BEL is also targeting larger exports of products like high masts
and luminaires. The company is constantly scouting for such opportunities to diversify its
business and reduce its dependence on any single geography/vertical. BEL has also set aside
Rs100cr for brand acquisitions in virtually all its businesses. For instance, the company acquired
32% stake in Starlite Lighting through which it is looking at exporting CFL to Europe. The
company also plans to foray into newer verticals including inverters and water dispensers, which
is a big and rapidly growing market. We expect the company to leverage on its strong brand
recall/equity to grow its business.
BEL has a technical tie-up with Morphy Richards, UK for the introduction of new models in
mixers, water heaters, irons and coolers. Morphy Richards is UK’s No.1 Home Appliances
company and manufactures premium products in this category. BEL has also forayed into the
manufacturing of gas appliances and cooking range. For the purpose of network expansion, BEL
is taking new initiatives by way of a tie-up with Nardi, Italy.
With a brand like Bajaj, we foresee bright prospects for the company against the backdrop of the
discussed developments. We have not factored the above in our calculations due to lack of clarity
from management.
Financial Performance
The company increased its Net Sales by 27.8% to Rs1,085.2cr in FY2007 from Rs849cr in FY2006
on the back of strong growth (in the range of 23-33%) registered by all its Segments. During
FY2007-10E, we expect BEL to clock CAGR Revenue growth of 22%. We have factored in 15%
growth in volumes in the Electrical Appliances Division Vis-a-Vis the 24% growth clocked by the
division in the past three year. We have factored in 10% volume growth in the Luminaire Division
and 9-18% volume growth in Lighting and Fans Divisions. In terms of realisation growth, we have
factored in 2-7% realisations across Segments.
February
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Exhibit 10: Segment-wise Revenue Growth

FY2006 FY2007 FY2008 FY2009 FY2010 CAGR (%)
Engineering & Projects 265.3 330.0 394.3 496.8 658.3 26
Electrical Appliances 195.8 260.4 335.4 405.0 489.0 26
Luminaires 156.5 194.4 235.2 271.6 313.7 19
Fans 150.7 193.0 232.3 279.6 336.5 22
Lighting 109.7 135.3 160.7 185.6 214.3 18
Contribution from
(% of Sales) high- margin sements
increasing
Engineering & Projects

Electrical Appliances
} 30.1
22.2
29.6
23.4
29.0
24.7
30.3
24.7
32.7
24.3 } Contribution from
low-margin segments
}
decreasing
Luminaires
Fans } 17.8
17.1
17.4
17.3
17.3
17.1
16.6
17.0
15.6
16.7
Lighting 12.5 12.1 11.8 11.3 10.6
Others 0.2 0.1 0.1 0.1 0.1
We expect EBDITA Margins to Over FY2010E, PAT is expected to grow at a CAGR of 33.6% on the back of sustainable Margins.
sustain at current levels with We expect BEL to post an EBIDTA of Rs185cr in FY2010E, growing at a CAGR of 29% over
a positive bias FY2007-10E.We expect EBDITA Margins to sustain at current levels with a positive bias.
Exhibit 11: Revenue and Profitability (Rs cr)
January 30,
February 29,2008
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Bajaj Electricals
Following the shift in revenue mix, BEL’s Return Ratios have improved substantially over
FY2004-07. The company’s RoE has improved from 15% to 34% while RoCE has improved from
8% to 22% respectively, over the mentioned period. Going ahead, we expect the Return Ratios to
stabilse at around 25%-30% levels. We estimate the company to clock RoE of 31.8% and RoCE
of 26.5% in FY2010E, which will support higher valuations going ahead.
Exhibit 12: Improving Return Ratios
Concerns
Intensifying competition: A number of players and intensifying competition in the different

Segments are expected to squeeze BEL’s Margins going ahead.But, on account of BEL being in
premium segments, it is insulated from margin pressures.
Steep input costs: The company’s E&P Division is raw material intensive. Hence, any increase
in the price of the key raw materials such as steel and zinc could adversely impact BEL’s Margins.
However, in the medium term, we believe that the company is in a position to pass on the raw
material hikes to consumers.
Outlook and Valuation
We believe that a large addressable market opportunity, a scalable business model, strong
‘customer connect’, and committed promoters, makes BEL a strong contender in the Domestic
Appliances arena. Our recent interaction with management re-affirmed our view that BEL is
embarked on high-growth path. Further, given BEL’s dominant position in its areas of operation,
we expect it to record strong CAGR Sales growth of 22% over FY2007-10E. Pertinently, in the
nine months ending FY2008, the company recorded higher growth amidst a high interest rate
regime. Going ahead, with interest rates softening, we expect the company to record a better
performance.
February
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Bajaj Electricals
BEL is constantly initiating measures to expand and diversify its business to drive growth. We are
positive on BEL’s business model and future growth prospects in all its verticals viz., Lighting,
Luminaries, Home Appliances, Fans, Engineering and Projects. The company’s leadership
position in these verticals is expected drive strong Revenue and Profitability growth at both the
EBITDA and Net Profit levels. We estimate Net Profits to clock a CAGR growth of 33.6% over
FY2007-10E. At Rs490, the stock is trading at attractive valuations of 9.2x FY2010E Earnings
and FY2010E EV/Sales of 0.5x. In comparison, peer Havells is trading at 14x FY2010E
Earnings and FY2010E EV/EBITDA of 10.3x. We Initiate Coverage on the stock, with a Buy
recommendation and Target Price of Rs639. At the Target Price the stock would quote at
12x FY2010E Earnings.
Exhibit 13: Comparative Valuation (FY2010E)

Sales OPM(%) PAT P/E RoE EV/EBITDA
BEL 1,969 9.4 92 9.2 31.8 5.7
Havell’s* 3,215 9.6 216 13.9 20.2 10.3
Source: Angel Research, *Bloomberg Consensus
Exhibit 14: P/E Band
Source: Angel Research
January 30,
February 29,2008
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Profit & Loss Statement Rs crore Balance Sheet Rs crore

Y/E March FY2007 FY2008E FY2009E FY2010E Y/E March FY2007 FY2008E FY2009E FY2010E
Net Sales 1,085.2 1,329.5 1,604.1 1,969.1 SOURCES OF FUNDS
% chg 27.8 22.5 20.7 22.8 Equity Share Capital 8.6 17.3 17.3 17.3
Total Expenditure 998.9 1,207.2 1,454.9 1,784.0 Reserves & Surplus 108.2 139.3 195.7 271.9
EBIDTA 86.3 122.3 149.2 185.1 Shareholders Funds 116.8 156.6 213.0 289.2
(%of Net Sales) 8.0 9.2 9.3 9.4 Total Loans 237.2 282.2 322.2 362.2
Other Income 6.6 6.6 6.6 6.6 Deffered Tax Liability (net) 7.3 7.3 7.3 7.3
Depreciation& Amortisation 7.3 8.3 9.3 10.3 Total Liabilities 361.3 446.0 542.4 658.6
Interest 25.3 31.0 35.4 39.8 APPLICATION OF FUNDS
PBT 60.3 89.5 111.0 141.5 Gross Block 136.4 151.1 168.8 187.5
(% of Net Sales) 5.6 6.7 6.9 7.2 Less: Acc.Depreciation 45.5 53.8 63.1 73.4
Extraordinary Expense/(Inc.) 0.1 - - - Net Block 90.9 97.3 105.8 114.1
Tax 21.7 31.3 38.9 49.5 Capital Work-in-Progress 0.6 0.6 0.7 0.8
(% of PBT) 35.9 35.0 35.0 35.0
Investments 22.3 22.3 22.3 22.3
PAT 38.6 58.2 72.2 92.0
Current Assets 565.6 684.2 823.7 999.4
% chg 29.4 50.7 24.0 27.5
Current liabilities 318.1 358.4 410.0 478.0
Ad. PAT 38.6 58.2 72.2 92.0
Net Current Assets 247.5 325.8 413.7 521.4
% chg 29.2 50.9 24.0 27.5
Total Assets 361.2 446.0 542.4 658.6
Cash Flow Statement Rs crore Key Ratios

Y/E March FY2007 FY2008E FY2009E FY2010E Y/E March FY2007 FY2008E FY2009E FY2010E
Profit before tax 60.3 89.5 111.0 141.5 Per Share Data (Rs)
Depreciation 7.3 8.3 9.3 10.3 EPS 44.6 33.7 41.8 53.2
(Inc)/Dec in Working Capital (54.6) (87.3) (72.8) (98.7) Cash EPS 53.1 38.5 47.1 59.2
Interest (Net) 23.1 28.8 33.2 37.6 DPS 8.1 8.0 8.0 8.0
Direct taxes paid 21.7 31.3 38.9 49.5 Book Value 135.2 90.6 123.2 167.3
Others (5.5) (5.6) 1.1 2.6 Operating Ratio

Inventory (days) 40.3 40.1 38.4 37.2
Cash Flow from Operations 8.8 2.4 43.0 43.7
Debtors (days) 120.4 120.9 119.7 118.3
Inc./(Dec.) in Fixed Assets 4.5 14.8 17.8 18.8
Creditors (days) 101.2 92.1 87.8 83.7
Free Cash Flow 4.4 (12.4) 25.1 25.0
Returns ( %)
(Inc)/Dec in Investments (7.4) - - -
RoE 33.1 37.2 33.9 31.8
Issue of Equity - 8.6 - -
RoCE 21.9 25.6 25.8 26.5
Inc./(Dec.) in loans 44.4 45.0 40.0 40.0
Dividend Payout 20.8 27.1 21.9 15.0
Dividend Paid (Incl.Tax) 8.0 15.8 15.8 15.8
Valuation Ratio (x)
Interest (Net) 23.1 28.8 33.2 37.6
P/E 11.0 14.6 11.7 9.2
Cash Flow from Financing 13.3 9.1 (9.0) (13.4) P/E(CashEPS) 9.2 12.7 10.4 8.3
Inc./(Dec.) in Cash 10.3 (3.3) 16.2 11.6 P/BV 3.6 5.4 4.0 2.9
Opening Cash balances 19.1 29.4 26.1 42.3 EV/Sales 1.0 0.8 0.7 0.5
Closing Cash balances 29.4 26.1 42.3 53.9 EV/EBITDA 12.2 8.6 7.1 5.7
February
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Fund Management & Investment Advisory 022 - 4040 3800 / 2835 9600)
(
Ajay Jaiswal Investment Strategist (Kolkata) ajay.jaiswal@angeltrade.com
P. Phani Sekhar Fund Manager phani.sekhar@angeltrade.com
Research Team 022 - 4040 3800 / 2835 9600)
(
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January 30,
February 29,2008
Angle Broking
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Bajaj Electricals
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February
January 30,
29,2008

Bajaj Electrical Company Report 29.02.08

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Angel Broking

BUY ‘Luminous Prospects’

Exhibit 1: Business Overview

Home Appliances Division

Exhibit 2: Home Appliances Segment - Product-wise marketshare

Exhibit 3: Home Appliances - Marketshare Home Appliances - Sales growth

Source: Company, Angel Research

Exhibit 4: Fans Industry - Marketshare Fans Division - Sales growth

Source: Company, Angel Research

Exhibit 5: Lighting and CFL Business - Marketshare

Source: Company, Angel Research

Exhibit 6: Lighting Division - Sales growth

Source: Company, Angel Research

Exhibit 7: Luminaire Division - Marketshare Luminaire Division - Sales growth

Source: Company, Angel Research

Engineering and Projects (E&P) Division

In the High Masts and Poles High Masts and Poles

Exhibit 8: Key projects executed till date

Leveraging on Strong Distribution Network, brands and marketshare

Shift in revenue mix with focus on high-Margin E&P Division

Exhibit 9: Order Book - Break-up

Future growth drivers – Overseas markets, acquisitions, newer verticals

Exhibit 10: Segment-wise Revenue Growth

Engineering & Projects

Exhibit 11: Revenue and Profitability (Rs cr)

Source: Company, Angel Research

Exhibit 12: Improving Return Ratios

Source: Company, Angel Research

Intensifying competition: A number of players and intensifying competition in the different

Outlook and Valuation

Exhibit 13: Comparative Valuation (FY2010E)

Exhibit 14: P/E Band

Source: Angel Research

Profit & Loss Statement Rs crore Balance Sheet Rs crore

Cash Flow Statement Rs crore Key Ratios

Others (5.5) (5.6) 1.1 2.6 Operating Ratio

Private Client Group Offices: Sub - Broker Marketing:

Angel Broking Limited

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