Bajaj Electricals spurts after board plans to review corporate structure

Bajaj Electricals rallied 7.50% to Rs 1,125.15 after the board decided to undertake a review of its existing corporate structure, by evaluating a range of options and alternatives (like demerger(s), subsidarisation(s), strategic partnerships etc.).

Bajaj Electricals (BEL) is currently engaged in (i) Consumer Product segment (CP) (which includes appliances, fan and consumer lighting products) and (ii) Engineering Procurement and Construction segment (EPC) (which includes power transmission and power distribution and illumination projects).

Accordingly, the board has authorised the BEL Management to evaluate and recommend such options and alternatives, subject to detailed evaluation and consider housing the power transmission and power distribution business verticals as a standalone /independent legal entity.

The strategic objectives outlined by the board for undertaking entails: first, streamlining of the business structure to enhance market positions and deliver long term growth; second, attracting right talent and providing enhanced growth opportunities to existing talent in line with a sharper strategic focus on each business segment under separate entities; third, tailored capital structure and capital allocation policies based on business-specific dynamics.

Fourth, sharper, well defined corporate positioning coupled with value unlocking for all stakeholders; fifth, distinct investment profiles to attract deeper and broader investor bases; and sixth, accelerating sustainability initiatives and expediting ESG practices.

Bajaj Electricals' consolidated net profit jumped 17.8% to Rs 62.55 crore on a 6.1% rise in net sales to Rs 1,283.44 crore in Q2 FY22 over Q2 FY21.

Bajaj Electricals, a part of Bajaj Group, makes consumer products (appliances, fans, lighting) and executes EPC contracts (illumination, transmission line towers and power distribution).

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