Bajaj Electricals tanks 5% as high input costs drag Q4 net profit down 29% YoY

Shares of Bajaj Electricals slid 5.2 per cent in early trade Wednesday as the household appliance maker reported a sharp drop in Jan-Mar net profit owing to high input costs although price hikes helped improve the company’s topline.

Bajaj Electricals reported a 28.73 per cent decline in consolidated net profit at Rs 38.67 crore for the fourth quarter ended March 2022. The company had posted a net profit of Rs 54.26 crore for March quarter of the previous fiscal year.

The company’s shares fell to a low of Rs 946.45 as against Rs 997.85 at previous close on the BSE.

The company reported a consolidated profit of Rs 39 crore for the three months, down 28 per cent year-on-year. Consolidated revenues grew by 6 per cent to Rs 1,334 crore, primarily led by the price increases taken in preceding quarters.

The input cost pressure was clearly visible in the company earnings before interest, tax, depreciation and amortisation (EBITDA), which declined by 15 per cent year-on-year to Rs 62 crore. EBITDA margin narrowed by 115 basis points to 4.6 per cent, reports said.

The company declared a dividend of Rs 3 per share.

It also revised its dividend distribution policy to maintain a payout between 20-40% of its net profit, subject to the board's discretion.

Anuj Poddar, the executive director of the company, called the performance during the quarter an aberration due to high commodity prices, reports said.

The company has been on an undertaking to improve margins in its consumer appliances business by 1 percentage point every year while narrowing the losses in its engineering, procurement and construction (EPC) business.

The consumer appliances business recorded margins of just over 7 per cent compared to over 9 per cent a year ago, Poddar said. The EPC business reported a Rs 7 crore profit before interest and tax.

Bajaj Electricals reported being net debt-free at a consolidated level as of 31 March for the first time in four decades.