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Consumer business will continue to grow at healthy pace: Bajaj Electricals CFO

The company posted a three-fold jump in Q4 net profit to Rs 28.5 crore

May 22, 2019 / 07:56 PM IST
 
 
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Bajaj Electricals is looking to improve margins under the consumer products business in FY20 by maintaining a steady growth rate, the company's Chief Financial Officer Anant Purandare told Moneycontrol in interaction about the growth prospects and plans for FY20. Excerpts:

The profit jumped by 290 percent in Q4. What led to this growth?

We had an exceptional item of Rs 89.36 crore in FY18, which was an impairment provision for an investment in our joint venture Starlite Lighting. This was absent in FY19 and that is the reason for the jump in profitability.

The consumer products grew by 15 percent in the March quarter. Do you expect this trend to continue?

When it comes to the consumer products segment, we have done very well.  In FY19, the segment revenue grew by 23 percent and the EBIT margins have improved from 4.9 percent to 6.6 percent. We are looking to grow at a similar rate. If that happens, the operating leverage will give us a better EBIT margin.

Are you slowing down on the EPC side of the business?

We bid selectively when it comes to new projects in the EPC (engineering, procurement and construction) segment and are hence not expecting big growth in the business. But EPC has been a big segment for the company for a while because we have a billing for the Saubhagya scheme in Uttar Pradesh. This order will be completed in December. There is a balance order for Rs 1,300 crore which shall be executed during this financial year.

Has Nirlep been fully integrated into the company?

Nirlep Appliances was acquired in FY19 and its numbers are part of the consolidated financials. A lot of cleaning has happened at Nirlep. With our network and distribution, Nirlep should also give positive numbers going forward.

In terms of product expansion, are you open to entering any new category?

We bring new products to our existing portfolio. For example, in the fans segment, we have introduced germ and dust-free fans. Similarly, in the mixer-grinder and water heater segments, we will look at launching products in the premium price range.

M Saraswathy
first published: May 22, 2019 07:56 pm

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