Disappointing Q2 figures drag lower Bajaj Electricals counter

Bajaj Electricals dropped 2.49% to Rs 238.50 at 14:30 IST on BSE after net profit dropped 10.76% to Rs 16.66 crore on 10.67% fall in total income to Rs 1013.43 crore in Q2 September 2016 over Q2 September 2015.

The result was announced during market hours today, 10 November 2016.

Meanwhile, the S&P BSE Sensex was up 401.70 points or 1.47% at 27,654.23.

High volumes were witnessed on the counter. On BSE, so far 82,196 shares were traded in the counter as against average daily volume of 42,868 shares in the past one quarter. The stock hit a high of Rs 250 and a low of Rs 236.70 so far during the day. The stock had hit a 52-week low of Rs 155.35 on 29 February 2016. The stock had hit a 52-week high of Rs 280 on 10 August 2016. The stock underperformed the market over the past one month till 9 November 2016, falling 6.89% compared with the Sensex's 2.88% fall. The scrip also underperformed the market in past one quarter, dropping 9.92% as against the Sensex's 2.96% decline.

The mid-cap company has equity capital of Rs 20.24 crore. Face value per share is Rs 2.

Commenting on the results, Shekhar Bajaj, Chairman and Managing Director, Bajaj Electricals said the lighting busines unit of the consumer products segment registered a sub optimal performance largely due to drop in demand for CFL and absence of EESL order for LED products in the current year as against the previous year. The sales of lighting busines unit has de-grown by 31%. To enhance the brand recall and support RREP (Range & Reach Expansion Programme) distribution model, the company continued its advertising spend during major events such as RIO Olympics, Wimbledon, Pro Kabaddi, etc. This coupled with increase in staff cost and other fixed costs, impacted the overall margins of the consumer products segment. However, rollout of RREP distribution is on track and the same would help in improving the overall performance of the company in Q3 and Q4 of the year ending 31 March 2017 (FY 2017).

Engineering, procurement, construction (EPC) segment has shown an improvement in margins by 1.1% i.e. from 6.4% to 7.5%, owing to effective project monitoring mechanism with better control over cost and thrust on collection of old receivables. EPC segment is now back on the profitable track and is expected to do well in the future. EPC segment has good order inflow and the current order book stands at Rs 2721 crore, comprising of Rs 1000 crore for transmission line towers; Rs 1545 crore for power distribution; and Rs 176 crore for illumination projects, he added.

Bajaj Electricals is an electric products maker and is a part of Bajaj Group.

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