bajaj electrical company report 29.02.08

1January 30, 2008 For Private Circulation Only - Sebi Registration No : INB 010996539February 29, 2008 For Private Circulation Only - Sebi Registration No : INB 010996539

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1

‘Luminous Prospects’We believe a large addressable market opportunity, scalable business model, strong'customer connect', and committed promoters, makes Bajaj Electricals (BEL) a strongcontender in the Domestic Appliances arena. Our recent interaction with the managementre-affirmed our view that BEL is embarked on high-growth path. We expect the company torecord a strong CAGR Sales and Net Profit growth of 22% and 33.6% over FY2007-10E,respectively. At Rs490, the stock is trading at attractive valuations of 9.2x FY2010EEarnings and FY2010E EV/Sales of 0.5x. In comparison, peer Havells is trading at 14xFY2010E 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 stockwould quote at 12x FY2010E Earnings.

Leveraging on strong Brands and substantial Marketshare: BEL has strong brandpositioning and well-spread distribution network. As per the company's internal estimates, itis the fastest growing player in the Rs4,400cr Domestic Appliances market, which isgrowing at 20% pa. In the Small Appliances market, BEL enjoys a marketshare of over15-30% across products.

Focus on high-Margin E&P Division: Post a shift in Revenue mix, BEL has beenfocusing on the high-Margin E&P Division. The E&P Division enjoys high Margins of 12-13%compared to overall margins of 8%. In FY2005, E&P contributed 14.8% (Rs99.5cr) of BEL'sGross Sales, which grew to 29.6% (Rs330cr) in FY2007. By FY2010E, we expect E&P tocontribute 32.7% (Rs658cr) of Gross Sales. We expect the E&P Division to clock 12% EBITMargins in FY2008-10E contributing 44.5% of total EBIT. We expect EBDITA Margins tosustain at current levels with a positive bias.

Future growth drivers - Overseas markets, acquisitions, newer verticals : BELplans to enhance its presence in UAE with a focus on the Lighting and Fans Segment. Itproposes to diversify its business in different geographies. BEL has also set aside Rs100crfor brand acquisitions across businesses. The company also plans to foray into newerverticals like inverters and water dispensers, which is a big and rapidly growing market.

Shareholding Pattern (%)

Promoters 67.4

MF / Banks / Indian FIs 10.1

FII / NRIs / OCBs 8.8

Indian Public / Others 13.7

BSE Code 500031

NSE Code BAJAJELEC

Reuters Code BJEL.BO

Bloomberg Code BJE IN

BSE Sensex 17,579

Nifty 5,224

Abs. 3m 1yr 3yr

Sensex (%) (7) 36 163

BEL (%) 21 118 392

Stock InfoSector Consumer Durable

Market Cap (Rs cr) 847

Beta 0.51

52 Week High / Low 740/189

Avg Daily Volume 8318

Face Value (Rs) 10

Reena Walia

Tel: 022 - 4040 3800 Ext: 331

E-mail:[email protected]

BUYPrice Rs490

Target Price Rs639

Investment Period 12 Months

Bajaj Electricals

3m 1yr 3yr

Rel.to Sen. (%) 29 82 229

Source: Company, Angel Research

Key FinancialsY/E March (Rs cr) FY2007 FY2008E FY2009E FY2010ENet Sales 1,085.2 1,329.5 1,604.1 1,969.1% chg 27.8 22.5 20.7 22.8Net Profits 38.6 58.2 72.2 92.0% chg 29.4 50.7 24.0 27.5OPM (%) 8.0 9.2 9.3 9.4EPS (Rs) 44.6 33.7 41.8 53.2P/E (x) 11.0 14.6 11.7 9.2P/BV (x) 3.6 5.4 4.0 2.9RoE (%) 33.1 37.2 33.9 31.8RoCE (%) 21.9 25.6 25.8 26.5EV/Sales (x) 1.0 0.8 0.7 0.5EV/EBITDA (x) 12.2 8.6 7.1 5.7

Girish Solanki

Tel: 022 - 4040 3800 Ext: 319

E-mail:[email protected]

2January 30, 2008 For Private Circulation Only - Sebi Registration No : INB 010996539February 29, 2008 For Private Circulation Only - Sebi Registration No : INB 010996539 2

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Bajaj Electricals

Company Background

Bajaj Electricals (BEL), a part of the Bajaj Group, is a 70-year old diversified company having fivemajor strategic business units (SBUs) viz., Home Appliances, Lighting, Luminaries, Fans andEngineering & Projects. In FY2007, BEL surpassed its mission of "Operation Triumph 1001" byclocking a turnover of Rs1,114cr. Going ahead, BEL is gearing up and plans to become a Rs2,001crcompany by 2010.

BEL has two manufacturing units wherein its Chakan facility manufactures fans while theRanjangaon, Pune unit manufactures galvanised materials. The company is also into themanufacture, erection and commissioning of Transmission Line Towers, Telecom Towers, MobileTelecom Towers and Wind Energy Towers. It has its own design centre and laboratory for itsLighting, Consumer Durable and Fan Divisions that enables the company to conduct full-fledgedR&D for product development.

The company has a strong pan-India marketing and distribution network comprising 19 branchoffices, 600 distributors, 5,000 authorised dealers, more than 1,25,000 retail outlets and over 230service franchises.

Group company, Bajaj International Pvt. Ltd, oversees all exports of BEL except the products of itsEngineering and Projects Unit.

Exhibit 1: Business Overview

Source: Company, Angel Research, Note: Overall Gross Sales also includes other items

BEL has a strong pan-Indiamarketing and distributionnetwork

Gearing up to become aRs2,001cr company by 2010



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Home Appliances Division

Currently, the domestic Home Appliances Segment is growing at around 20% on the back of rapidurbanisation and improving purchasing power of the Indian consumers. Further, consumerpreference is shifting to branded products from the unbranded and low-quality home appliances.Hence, share of the organised sector in the Home Appliances industry is set to improvegoing ahead.

In the Home Appliances Segment, BEL is one of the fastest growing players and enjoys strongbrand recognition. It is well entrenched in the Segment on account of having a strong distributionnetwork of more than 1,25,000 Retail outlets. As per the company’s internal estimates, thedomestic Home Appliances market stands at around Rs4,400cr and 65% of it is in theorganised segment.

BEL is the largest player in the Small Appliances market, with a marketshare of more than15-30% in a range of products. BEL’s products include irons, ovens, toasters, grinders (OTG),water heaters, room heaters, microwave ovens, food processors, etc. The company’scompetitors in this segment include Philips, Kenstar, Usha, Maharaja, Marloni, Sumeet and BPL,among others.

BEL has secured its sourcing requirements with some dedicated vendors situated at Noida, Delhi,Himachal Pradesh apart from importing from China.

Exhibit 2: Home Appliances Segment - Product-wise marketshareProducts Marketshare (%)Iron 20OTG 30Mixer 20Water Heater 20


Consumer preference isshifting to branded productsfrom the unbranded andlow-quality home appliances

BEL has a strong distributionnetwork of more than 1,25,000Retail outlets



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


The company's Home Appliance Division recorded a CAGR growth of 27.4% overFY2003-2007 from Rs99cr to Rs260cr.

Fans Division

As per BEL’s internal estimates, the Rs1,850cr domestic Fans Industry is currently growing ataround 14%. Booming Housing and Construction Industries have been the main growth driversfor 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 inthe Premium segment. It manufactures different types of fans including ceiling, table,pedestal, wall mounting and exhaust fans. The company sells Magnifique under the Premiumdecorative 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 furthertechnical advancement. BEL expects the prices of fans to decline in the future, indicating thatsales in the unorganised segment would shift to the organised segment, which would benefitcompanies like itself. Further, BEL has premium products in this segment which would cushionany price decline.

BEL's Fans Division has grown at a CAGR of 21.5% over FY2003-2007 from Rs85cr to Rs185cr,respectively.

27.4 % CAGR

Booming Housing andConstruction Industries havebeen driving the Fans Segment



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Exhibit 4: Fans Industry - Marketshare Fans Division - Sales growth21.5% CAGR

Lighting Division

As per BEL’s internal estimates, the Rs2,550cr Indian Lighting Segment constitutes 70-75% oforganised players. The CFL Segment constitutes 85% of organised players.

The company’s Lighting products are only next to Philips in terms of product pricing and brandequity. BEL manufactures products like GLS lamps, fluorescent tube lights (FTL), compactfluorescent lamps (CFL), miniature lamps, domestic luminaries and ballasts & starters. BEL holds10% marketshare in GLS, 7% in FTL and 6% in CFL. The company’s competitors in this Segmentinclude Philips, Crompton, Surya, Wipro, Osram and Havells.


Exhibit 5: Lighting and CFL Business - Marketshare

BEL’s Lighting products areonly next to Philips in terms ofproduct pricing and brandequity



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Luminaire Division

As per BEL’s internal estimates, the Rs1,000cr domestic Luminaire industry is growing at 15% pa.The organised sector contributes 60% of total sales of the Segment. Factors driving growth in thisindustry are the upcoming Retail formats, IT parks, malls, showrooms, rapid urbanisation andhuge spending on infrastructure by the government.

BEL sells products like industrial, commercial, decorative, street light, flood light, light emittingdiodes (LED), lighting electronic (LE) and lighting control (LC) under its Luminaire Segment. Theseproducts are next only to the products of Philips in terms of pricing and brand. BEL is a marketleader in street lights, flood lights and industrial applications luminaires. It’s competitors in thisbusiness include Philips, Crompton and Wipro.

BEL supplies luminaires to industrial and government clients like Tisco, Telco, TEC, RelianceGroup of Industries, L&T, Aditya Birla Group, Concor, State Electricity Boards (SEBs), BSES,BEST, etc.

BEL plans to expand its network and enhance its focus on the kiranas, malls and retail outlets. Tomarket its products on a larger scale, the company is promoting its products to the builders, realtycompanies 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

BEL is promoting its productsto the builders, realtycompanies and utilities

BEL is a market leader in streetlights, flood lights andindustrial applicationsluminaires



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BEL has technical tie-ups with Trilux Lenze of Germany for premium technical lighting and withHelvar of UK for lighting controls and ballasts. The company’s future plans in this Segment entailsfocusing on new segments like IT, BPO, Retail and Healthcare and to promote its products tobuilders and architects. The company plans to introduce new products with LED light source andto develop designer street lights.

The company’s Luminaire Division has grown at a CAGR of 24.1% over FY2003-2007 from Rs81crto Rs193cr.

Engineering and Projects (E&P) Division

BEL’s E&P business is divided into three Divisions viz., Special Projects, High Masts and Polesand Towers.

Special Projects

Major growth drivers for this business includes electricity connection to 80cr households in 1,25,000villages 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 andinternational levels. Under this Division, BEL undertakes projects such as turnkey lighting, airportlighting, sports lighting, and rural electrification.

As per BEL’s internal estimates, it is a leader in Sports lighting projects and Power Plant lighting inwhich it holds around 70% marketshare. Its major clients include NTPC, Bhel, SEBs and AAI. Ithas also entered into a technical arrangement with Abacus, UK for sports lighting. India iscurrently in the phase of setting up new power plants. Hence, demand for BEL’s Special Projectsis likely to improve going ahead.


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

24.1% CAGR

BEL is a leader in Sportslighting projects and PowerPlant lighting in which it holds70% marketshare



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Exhibit 8: Key projects executed till dateMajor 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 11Source: Company

BELs’ order book position, as on October 2007, stood at Rs200cr to be executed over the next8-12months.

High Masts and Poles

BEL designs, supplies, erects and commissions high masts, signages and street light poles. Asper it’s internal estimates, in the High Masts and Poles Segment, the company commands amarketshare 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 Segmentviz., high masts and lighting for RIL’s Jamnagar plant, signages for HPCL and RIL and streetlighting for CIDCO Mumbai, NH-45 Tamil Nadu and Mumbai. etc. It’s competitors in this businessare Philips, Crompton and BP Projects. Also, the Jawaharlal Nehru National Urban RenewalMission 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, telecommunicationtowers 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. Aninvestment of Rs2,00,000cr is expected to increase the capacity to transfer power from thecurrent 9,000MW to 30,000MW by FY2012.

In the High Masts and PolesSegment, it commands amarketshare of 65%



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Investment Argument

Leveraging on Strong Distribution Network, brands and marketshare

BEL has a strong network having 19 branch offices, a chain of 600 distributors, 5000 authoriseddealers, over 125,000 retail outlets and over 230 service centers spread across the country. Thecompany enjoys strong brand positioning in various products. BEL’s strong brand value andpositioning in the Indian market has enabled it to maintain its appeal for electronic appliancesagainst stiff competition from international brands and products.

As per the company’s internal estimates, suggests that it is the fastest growing player in theRs4,400cr domestic appliances market which is growing at 20% pa., In the Small Appliancesmarket, BEL enjoys a dominant marketshare of over 15-30% in various categories. Thecompany, as per its estimates, enjoys a marketshare of 14% in the Rs1,850cr Fans Segmentwhich is growing at 14% pa. The Rs2,550cr Lighting Segment, which is growing at 15% pa., itenjoys a marketshare of 6%. Given its dominant position in these areas, the company seems wellset to leverage on the strong growth expected going ahead.

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

Post a shift in Revenue mix, BEL has been focusing on the high-Margin engineering andprojects (E&P) Segment. In FY2005, the E&P Segment contributed 14.8% (Rs99.5cr) of BEL’sGross Sales, which in FY2007 grew to 29.6% (Rs330cr). Going ahead, by FY2010E, we expectthis Segment to contribute 32.7% (Rs658cr) of its Gross Sales. The shift in Revenue mix is alsoexpected to drive the company’s overall Margins going ahead as E&P enjoys high Margins of12-13%. We expect the E&P Segment to clock 12% EBIT Margins in FY2008-10E contributingnearly 44.5% of total EBIT. As of October 2007, BEL’s order book stood at Rs200cr to beexecuted over the next 8-12 months.

BEL is also aggressive in the Rural Electrification Segment and expects to reap the benefits ofreforms in the Indian Power Sector. The company has bagged an order worth Rs53cr to electrify40,000 families below the poverty line. On account of the above, we expect EBDITA Margins tosustain at current levels with a positive bias.

BEL enjoys a dominantmarketshare of over 15-30% invarious categories

By FY2010E, we expect the E&PSegment to contribute 32.7%(Rs658cr) of the company’sGross Sales

Source: Company

Exhibit 9: Order Book - Break-upTransmission Line Towers Rs 100crSpecial Projects Rs50crHigh Mast Poles Rs50cr



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Future growth drivers – Overseas markets, acquisitions, newer verticals

BEL has an office in Sharjah and is looking at enhancing its presence in this market with a focuson the Lighting and Fans Segment. The company is targeting to cater to stadium lighting in UAEalong with plans to put up a ceiling fan assembly unit in the region. It is also focusing oninstitutional sales in this market. BEL is also targeting larger exports of products like high mastsand luminaires. The company is constantly scouting for such opportunities to diversify itsbusiness and reduce its dependence on any single geography/vertical. BEL has also set asideRs100cr for brand acquisitions in virtually all its businesses. For instance, the company acquired32% stake in Starlite Lighting through which it is looking at exporting CFL to Europe. Thecompany also plans to foray into newer verticals including inverters and water dispensers, whichis a big and rapidly growing market. We expect the company to leverage on its strong brandrecall/equity to grow its business.

BEL has a technical tie-up with Morphy Richards, UK for the introduction of new models inmixers, water heaters, irons and coolers. Morphy Richards is UK’s No.1 Home Appliancescompany and manufactures premium products in this category. BEL has also forayed into themanufacturing of gas appliances and cooking range. For the purpose of network expansion, BELis 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 thediscussed developments. We have not factored the above in our calculations due to lack of clarityfrom management.

Financial Performance

The company increased its Net Sales by 27.8% to Rs1,085.2cr in FY2007 from Rs849cr in FY2006on the back of strong growth (in the range of 23-33%) registered by all its Segments. DuringFY2007-10E, 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 thedivision in the past three year. We have factored in 10% volume growth in the Luminaire Divisionand 9-18% volume growth in Lighting and Fans Divisions. In terms of realisation growth, we havefactored in 2-7% realisations across Segments.

The company has acquired 32%stake in Starlite Lighting



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FY2006 FY2007 FY2008 FY2009 FY2010 CAGR (%)Engineering & Projects 265.3 330.0 394.3 496.8 658.3 26Electrical Appliances 195.8 260.4 335.4 405.0 489.0 26Luminaires 156.5 194.4 235.2 271.6 313.7 19Fans 150.7 193.0 232.3 279.6 336.5 22Lighting 109.7 135.3 160.7 185.6 214.3 18(% of Sales)Engineering & Projects 30.1 29.6 29.0 30.3 32.7Electrical Appliances 22.2 23.4 24.7 24.7 24.3Luminaires 17.8 17.4 17.3 16.6 15.6Fans 17.1 17.3 17.1 17.0 16.7Lighting 12.5 12.1 11.8 11.3 10.6Others 0.2 0.1 0.1 0.1 0.1

Exhibit 10: Segment-wise Revenue Growth


Over FY2010E, PAT is expected to grow at a CAGR of 33.6% on the back of sustainable Margins.We expect BEL to post an EBIDTA of Rs185cr in FY2010E, growing at a CAGR of 29% overFY2007-10E.We expect EBDITA Margins to sustain at current levels with a positive bias.

Contribution fromhigh- margin sements

increasing

Contribution fromlow-margin segments

decreasing

}}

}}


Exhibit 11: Revenue and Profitability (Rs cr)

We expect EBDITA Margins tosustain at current levels witha positive bias



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Concerns

Intensifying competition: A number of players and intensifying competition in the differentSegments are expected to squeeze BEL’s Margins going ahead.But, on account of BEL being inpremium segments, it is insulated from margin pressures.

Steep input costs: The company’s E&P Division is raw material intensive. Hence, any increasein 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 rawmaterial 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 DomesticAppliances arena. Our recent interaction with management re-affirmed our view that BEL isembarked 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 thenine months ending FY2008, the company recorded higher growth amidst a high interest rateregime. Going ahead, with interest rates softening, we expect the company to record a betterperformance.

Following the shift in revenue mix, BEL’s Return Ratios have improved substantially overFY2004-07. The company’s RoE has improved from 15% to 34% while RoCE has improved from8% to 22% respectively, over the mentioned period. Going ahead, we expect the Return Ratios tostabilse at around 25%-30% levels. We estimate the company to clock RoE of 31.8% and RoCEof 26.5% in FY2010E, which will support higher valuations going ahead.


Exhibit 12: Improving Return Ratios



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BEL is constantly initiating measures to expand and diversify its business to drive growth. We arepositive 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 leadershipposition in these verticals is expected drive strong Revenue and Profitability growth at both theEBITDA and Net Profit levels. We estimate Net Profits to clock a CAGR growth of 33.6% overFY2007-10E. At Rs490, the stock is trading at attractive valuations of 9.2x FY2010E Earningsand FY2010E EV/Sales of 0.5x. In comparison, peer Havells is trading at 14x FY2010EEarnings and FY2010E EV/EBITDA of 10.3x. We Initiate Coverage on the stock, with a Buyrecommendation and Target Price of Rs639. At the Target Price the stock would quote at12x 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 5.7Havell’s* 3,215 9.6 216 13.9 20.2 10.3

Source: Angel Research

Exhibit 14: P/E Band

Source: Angel Research, *Bloomberg Consensus



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Profit & Loss Statement Rs croreY/E March FY2007 FY2008E FY2009E FY2010E

Net Sales 1,085.2 1,329.5 1,604.1 1,969.1% chg 27.8 22.5 20.7 22.8

Total Expenditure 998.9 1,207.2 1,454.9 1,784.0

EBIDTA 86.3 122.3 149.2 185.1

(%of Net Sales) 8.0 9.2 9.3 9.4

Other Income 6.6 6.6 6.6 6.6

Depreciation& Amortisation 7.3 8.3 9.3 10.3

Interest 25.3 31.0 35.4 39.8

PBT 60.3 89.5 111.0 141.5

(% of Net Sales) 5.6 6.7 6.9 7.2

Extraordinary Expense/(Inc.) 0.1 - - -

Tax 21.7 31.3 38.9 49.5

(% of PBT) 35.9 35.0 35.0 35.0

PAT 38.6 58.2 72.2 92.0

% chg 29.4 50.7 24.0 27.5

Ad. PAT 38.6 58.2 72.2 92.0

% chg 29.2 50.9 24.0 27.5

Y/E March FY2007 FY2008E FY2009E FY2010E

SOURCES OF FUNDSEquity Share Capital 8.6 17.3 17.3 17.3

Reserves & Surplus 108.2 139.3 195.7 271.9

Shareholders Funds 116.8 156.6 213.0 289.2

Total Loans 237.2 282.2 322.2 362.2

Deffered Tax Liability (net) 7.3 7.3 7.3 7.3

Total Liabilities 361.3 446.0 542.4 658.6

APPLICATION OF FUNDS

Gross Block 136.4 151.1 168.8 187.5

Less: Acc.Depreciation 45.5 53.8 63.1 73.4

Net Block 90.9 97.3 105.8 114.1

Capital Work-in-Progress 0.6 0.6 0.7 0.8

Investments 22.3 22.3 22.3 22.3

Current Assets 565.6 684.2 823.7 999.4

Current liabilities 318.1 358.4 410.0 478.0

Net Current Assets 247.5 325.8 413.7 521.4

Total Assets 361.2 446.0 542.4 658.6

Balance Sheet Rs crore

Cash Flow Statement Rs crore


Profit before tax 60.3 89.5 111.0 141.5

Depreciation 7.3 8.3 9.3 10.3

(Inc)/Dec in Working Capital (54.6) (87.3) (72.8) (98.7)

Interest (Net) 23.1 28.8 33.2 37.6

Direct taxes paid 21.7 31.3 38.9 49.5

Others (5.5) (5.6) 1.1 2.6

Cash Flow from Operations 8.8 2.4 43.0 43.7

Inc./(Dec.) in Fixed Assets 4.5 14.8 17.8 18.8

Free Cash Flow 4.4 (12.4) 25.1 25.0

(Inc)/Dec in Investments (7.4) - - -

Issue of Equity - 8.6 - -

Inc./(Dec.) in loans 44.4 45.0 40.0 40.0

Dividend Paid (Incl.Tax) 8.0 15.8 15.8 15.8

Interest (Net) 23.1 28.8 33.2 37.6

Cash Flow from Financing 13.3 9.1 (9.0) (13.4)

Inc./(Dec.) in Cash 10.3 (3.3) 16.2 11.6

Opening Cash balances 19.1 29.4 26.1 42.3

Closing Cash balances 29.4 26.1 42.3 53.9

Key Ratios


Per Share Data (Rs)EPS 44.6 33.7 41.8 53.2

Cash EPS 53.1 38.5 47.1 59.2

DPS 8.1 8.0 8.0 8.0

Book Value 135.2 90.6 123.2 167.3

Operating RatioInventory (days) 40.3 40.1 38.4 37.2

Debtors (days) 120.4 120.9 119.7 118.3

Creditors (days) 101.2 92.1 87.8 83.7

Returns ( %)RoE 33.1 37.2 33.9 31.8

RoCE 21.9 25.6 25.8 26.5

Dividend Payout 20.8 27.1 21.9 15.0

Valuation Ratio (x)P/E 11.0 14.6 11.7 9.2

P/E(CashEPS) 9.2 12.7 10.4 8.3

P/BV 3.6 5.4 4.0 2.9

EV/Sales 1.0 0.8 0.7 0.5

EV/EBITDA 12.2 8.6 7.1 5.7



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Fund Management & Investment Advisory ( 022 - 4040 3800 / 2835 9600)Ajay Jaiswal Investment Strategist (Kolkata) [email protected]. Phani Sekhar Fund Manager [email protected] Team ( 022 - 4040 3800 / 2835 9600)Hitesh Agrawal Head - Research, Cement, Media [email protected] Kour Nangra VP-Research, Pharmaceutical [email protected] Jajoo Automobile [email protected] Shah IT, Telecom [email protected] Nagraj Oil & Gas [email protected] Burde Metals & Mining [email protected] Agrawal Banking [email protected] Solanki Mid-cap [email protected] Kanani Infrastructure & Real Estate [email protected] Shah FMCG [email protected] Agrawal Mid-cap [email protected] Bambha PMS [email protected] Bagaria PMS [email protected] Vyas Research Associate (Pharmaceutical) [email protected] Walia Research Associate (Mid-cap) [email protected] Idnany Research Associate - (PMS) [email protected] Wagle Chief Technical Analyst [email protected] Joshi AVP Technical Advisory Services [email protected] Sanghvi Sr. Technical Advisor [email protected] Kunte Technical Advisor [email protected] Ail Technical Analyst [email protected] Jagtap Technical Analyst [email protected] Bhamre Fund Manager - Derivatives & Equities [email protected]

Commodities Research TeamAmar Singh Research Head (Commodities) [email protected] P Sr. Technical Analyst [email protected] Gupta Sr. Technical Analyst [email protected] Patki Sr. Technical Analyst [email protected] Research Team (Fundamentals)Badruddin Sr. Research Analyst (Agri) [email protected] Virvadia Sr. Research Analyst (Bullion) [email protected] Shetty Research Editor [email protected] Patil Production [email protected]

DisclaimerThis document is not for public distribution and has been furnished to you solely for your information and must not be reproduced or redistributed to any other person. Persons into whosepossession this document may come are required to observe these restrictions.Opinion expressed is our current opinion as of the date appearing on this material only. While we endeavor to update on a reasonable basis the information discussed in this material, there may beregulatory, compliance, or other reasons that prevent us from doing so. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subjectto change without notice. Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein.The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true and are for general guidance only. Whileevery effort is made to ensure the accuracy and completeness of information contained, the company takes no guarantee and assumes no liability for any errors or omissions of the information. Noone can use the information as the basis for any claim, demand or cause of action.Recipients of this material should rely on their own investigations and take their own professional advice. Each recipient of this document should make such investigations as it deems necessaryto arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult their own advisorsto determine the merits and risks of such an investment. Price and value of the investments referred to in this material may go up or down. Past performance is not a guide for future performance.Certain transactions - futures, options and other derivatives as well as non-investment grade securities - involve substantial risks and are not suitable for all investors. Reports based on technicalanalysis centers on studying charts of a stock's price movement and trading volume, as opposed to focusing on a company's fundamentals and as such, may not match with a report on a company'sfundamentals.We do not undertake to advise you as to any change of our views expressed in this document. While we would endeavor to update the information herein on a reasonable basis, Angel Broking, itssubsidiaries and associated companies, their directors and employees are under no obligation to update or keep the information current. Also there may be regulatory, compliance, or other reasonsthat may prevent Angel Broking and affiliates from doing so. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to changewithout notice.Angel Broking Limited and affiliates, including the analyst who has issued this report, may, on the date of this report, and from time to time, have long or short positions in, and buy or sell thesecurities of the companies mentioned herein or engage in any other transaction involving such securities and earn brokerage or compensation or act as advisor or have other potential conflict ofinterest with respect to company/ies mentioned herein or inconsistent with any recommendation and related information and opinions.Angel Broking Limited and affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to thecompanies referred to in this report, as on the date of this report or in the past.

Research & Investment Advisory: Acme Plaza, 3rd Floor ‘A’ wing, M.V. Road, Opp Sangam Cinema, Andheri (E), Mumbai - 400 059

Ratings (Returns) Buy (> 15%) Accumulate (5 to 15%) Neutral (5 to -5%) Reduce (> -5%) Sell (> -15%)



Angle BrokingTM

Bajaj Electricals

Central Support & Registered Office:G-1, Akruti Trade Centre, Road No. 7, MIDC Marol, Andheri (E), Mumbai - 400 093 Tel : 2835 8800 / 3083 7700

Angel Broking Limited

Corporate & Marketing Office : 612, Acme Plaza, M.V. Road, Opp Sangam Cinema, Andheri (E), Mumbai - 400 059 Tel : (022) 4000 3600 / 2835 9600Wealth Management : e-mail : [email protected] Tel : (022) 4000 3945 / 3900Investment Advisory Helpdesk : e-mail : [email protected] Tel : (022) 4040 3800Commodities : e-mail : [email protected] Tel : (022) 4000 3900 / 01Feedback : e-mail : [email protected] Tel : (022) 2835 5000

Andheri (W) - Dinesh NihalaniTel: (022) 2635 2345 / 6668 0021

Bandra (W) - Gyan JoshiTel: (022) 2655 5560 / 70

Andheri (Lokhandwala) - Muskaan DoultaniTel : (022) 2639 2626 / 3255 0987

Bandra (W) - Faruq WakaniTel: (022) 6643 2694 - 99

Borivali (W) - Gautam AgarwalTel:(022) 2895 2600 / 1 / 2

Borivali (W) - Tarun DhamiTel: (022) 3092 1969 / 2892 8890

Chembur - Rajesh MehtaTel:(022) 6703 0210 / 11 /12

Ahmedabad (Bapu Nagar) - Milan KanabarTel : (079) 3026 0204 / 0205

Gandhinagar - Vivek ThakkerTel: (079) 4010 1010 - 31

Gondal - Lenin Trivedi Tel: (02825) 240 693 / 4

Himatnagar - Sanjay PatelTel: (02772) 241 008 / 241346

Ahmedabad (Maninagar) - Ashok KumarTel: (079) 3048 0241 / 0242 / 0245

Ahmedabad (Ramdevnagar) - Krunal PandyaTel : (079) 2692 6401 / 51

Ahmedabad (Satellite) - Rishi ParghiTel: (079) 4000 1000

Ahmedabad (Shahibaug) - Chirag RaghvaniTel: (079) 22861053 / 5 / 6

Amreli - Nishith HemaniTel: (02792) 228 800/231039-42

Anand - Alay BrahmbhattTel : (02692) 267 041-45

Ankleshwar - Ankit MathurTel: (02646) 652 681-85

Baroda - Rashmikant ThakarTel: (0265) 2226 103-04 / 6624 280

Baroda (Akota) - Jaydeep ShahTel: (0265) 2355 258 / 6499 286

Bhavnagar - Apurva DhamiTel: (0278) 2512099 / 755 / 3001717 / 18

Bhopal - Sandeep KothanaTel :(0755) 3256 663 / 4024 000

Ahmedabad (Gurukul) - Kaivalya ShahTel: (079) 6522 5510 / 3012 5492-94

Ahmedabad (Kalupur) - Jicky ThomasTel: (079) 3240 7474 / 75

Ahmedabad (Sabarmati) - Kaushik RathiTel : (079) 2692 6401 / 51

Ahmedabad (C. G. Road) - Ritesh PatelTel: (079) 4021 4023

Baroda (Manjalpur) - Chirag PatelMobile : 098252 27403

Thane (W) - Rajesh KumarTel: (022) 2539 0786 / 0789 / 0796

Vashi - Punit ChopraTel: (022) 2765 4749 / 2251

Fort - Ajit KarandikarTel: (022) 2263 4050-55

Ghatkopar (E) - Ashwin ThakkarTel: (022) 6799 3185 - 88 / 2510 1525

Goregaon (W) - Sanjiv DhamiTel: (022) 2878 9401 / 02

Kalbadevi - Viren VedTel: (022) 2243 5599 / 2242 5599

Kandivali (W) - Sachin GhelaniTel: (022) 2867 3800 / 2867 7032

Malad (E) - Satish KanwarjaniTel: (022) 2880 4440

Malad (W) - Tushar ShahTel: (022) 2880 0960 / 68

Mulund (W) - Niraj AnandTel: (022) 2562 2282

Kandivali (Thakur Village) - Akharam ChaudharyTel: (022) 2846 1267 / 1654 / 2056 / 2076

Chembur - (Basant) - Atul DwivediTel:(022) 3267 9114/ 15/ 16

Pune - Sameer Amrute/Shraddha GadekarTel : (020) 6620 6591 / 6620 6595

Pune - (Pentagon) Ishwar MagnaniTel : (020) 6640 8300 / 3052 3220

Rajkot (Bhaktinagar) - Dhaval DaveTel : (0281) 236 1935 / 329 6881 / 329 8100

Rajkot (Indira Circle) - Denish PatelTel : (0281) 2585 751, 99258 84848

Rajkot (Orbit Plaza) - Hitesh PopatTel: (0281) 2463 291-94

Surat (Ring Road) - Piyush BothraTel : (0261) 6696 666

Surendranagar - Prashant JaniTel : (02752) 325905 / 223305

Udaipur - Anurag JainTel - 098870 60723 / 099291 04723

Valsad - Vinod KumbarwadiaTel - (02632) 645 344 / 45

Vapi - Jalpa DesaiTel: (0260) 2400 210 / 214 / 236

Varachha - Naimesh Bhavsar(0261) 2551633 - 39

Rajkot (Star Chambers) - Manish BaradiaTel : (0281) 2233 230 / 50

Rajkot (Star Chambers) - Kiran MarthakTel : (0281) 2225 401 / 02 / 03

Secunderabad - SrinivasTel : (040) 6690 5192 / 3 / 4

Surat (Mahidharpura) - Sameet KapadiaTel: 2402 911 - 915

Surat (Parle Point) - Akshay PanwalaTel : (0261) 2257 990 / 909

Rajkot (University Rd.) - Prashant UkaniTel : (0281) 2577408

Rajkot (Ardella) Hitesh RupareliyaTel : (0281) 2440 266 - 266

Rajkot (202 Race Course) Prashant UkaniTel : (0281) 2921 568 / 99049 10001

Vile Parle (W) - Dimple ShahTel: (022) 2610 2894 / 95

Gurgaon - Pankaj Varma Tel: (0124) 4218 704

Vijayawada - Badrinath MajetiTel :(0866) 6636900 / 901/ 902 / 903

Powai (E) - Prashant AutiTel: (022) 40262170 / 1 / 2 / 3.

New Delhi (Bhikaji Cama Place) - Sumit zBhuttanTel: (011) 41659 711/12

New Delhi (Lawrence Rd.) - Sanjeev KumarTel: (011) 3262 8699 / 8799

New Delhi (Pitampura) - Roopal AgarwalTel: (011) 4700 2380 / 84

New Delhi (Preet Vihar) -Gulshan KhuranaTel: (011) 4242 1105 - 07

Patel Nagar - Harpreet SinghTel : (011) 45030 600

Noida - Amit GuptaTel : (0120) 4639900 / 1 / 9

Indore - Alok RathiTel: (0731) 4042242 / 4044 366 / 4087 966

Jaipur - (Rajapark) Amit Kumar GargTel: (0141) 4000 500, 94143 14448

Mehsana - Alipt DoshiTel: (02762) 645 291 / 92

Nadiad - Vipul PatelTel : (0268) - 2527 230 / 31

Nashik - Nilesh SupekarTel: (0253) 6611 201 / 206

Kota - Sumit MaheshwariTel : (0744) 5100 470 / 2365 200

Jamnagar - Jwalant ShingalaTel : (0288) 266 4941-44, 3217 790

Jalgaon - Sandeep MundraTel: (0257) 3200 906

Jodhpur - Bharat PurohitTel: (0291) 5100- 941 - 948 / 98284 26786

Junagadh - Nimesh RaichuraTel : (0285) 2622 483 /2622 484

Palanpur - Paresh PatelTel : (02742) 645 171 / 72

Patan - Shikha SaxenaTel: (02766) 222 306

Porbandar - Ketan ThankiTel : (0286) 221 5310 / 31 / 221 5450

Regional Offices:

Private Client Group Offices: Sub - Broker Marketing:Mumbai - Prakarsh GagdaniTel: (022) 4040 3800 Fax: (022) 4040 3899

Ahmedabad (C. G. Road) - Arpit ShahTel: (079) 3007 4049 / 50

Surat - Ali Asgar RasiwalaMobile : (0261) 6696 666

Acme Plaza - Pankaj MungreTel: (022) 4000 3900 Fax: (022) 4000 3999

Branch Offices:

Chennai - Thiruneer SelvanTel: (044) 4226 9000 Fax: 2498 1742

Bengaluru - Dhiraj PandeyTel: (080) 4153 6700 - 03

Ahmedabad - Harshit BhavsarTel: (079) 3007 0749 - 751

Jaipur - Ranveer SinghJaipur - 302 001 Tel: (0141) 222 3334

Indore - Pramathu ChowkseyTel: (0731) 3013 360 - 65

Hyderabad - Shiva ShankarTel: (040) 6673 3573 / 74

Kanpur - Vivek SinghTel: (0512) 3297 478/3017 700

Nashik - Nilesh SupekarNashik - 422 002. Tel: (0253) 6614 235/236

New Delhi - Rohit PateriaTel: (011) 4605 6600 / 4151 2555 / 2666

Pune - Sunita MagnaniTel: (020) 2551 3143 / 2553 0912 - 14

Kolkata - Vijay KothariTel: (033) 4009 9899

Lucknow - Ejaz MoyiTel: (0522) 6567 826

Surat - Pinky KothariTel: (0261) 6696 666

Rajkot - Vijay PopatTel :(0281) 6451929 / 1910

Visakhapatnam - Vamshi KrishnaTel :(0891) 6620 572-75

Nagpur - Sanchit TiwariTel: (0712) 6461 678

bajaj electrical company report 29.02.08

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