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Bajaj Electricals Ltd.

BSE: 500031 Sector: Consumer
NSE: BAJAJELEC ISIN Code: INE193E01025
BSE 14:20 | 15 Apr 1061.95 3.50
(0.33%)
OPEN

1065.00

HIGH

1067.35

LOW

1038.85

NSE 14:09 | 15 Apr 1060.55 1.40
(0.13%)
OPEN

1062.00

HIGH

1067.25

LOW

1036.60

OPEN 1065.00
PREVIOUS CLOSE 1058.45
VOLUME 1713
52-Week high 1123.70
52-Week low 306.00
P/E 106.94
Mkt Cap.(Rs cr) 12,165
Buy Price 1060.25
Buy Qty 3.00
Sell Price 1061.50
Sell Qty 2.00
OPEN 1065.00
CLOSE 1058.45
VOLUME 1713
52-Week high 1123.70
52-Week low 306.00
P/E 106.94
Mkt Cap.(Rs cr) 12,165
Buy Price 1060.25
Buy Qty 3.00
Sell Price 1061.50
Sell Qty 2.00

Bajaj Electricals Ltd. (BAJAJELEC) - Chairman Speech

Company chairman speech

Shekhar Bajaj

Chairman & Managing Director

Dear Shareholders

It gives me immense pleasure to share with you your Company's performance for the year2019-20.

Fiscal 2019-20 was a year of slow growth for the Indian economy a trend that has beencarried over from the previous year and weak sentiments were noted globally even beforethe outbreak of the COVID-19 pandemic. However challenging times and slowdowns offerperfect opportunities for us to reinvent ourselves and become more resilient. So it hasbeen a particularly important year for your Company as we mark the start of atransformational journey to build a future-ready Bajaj Electricals. Over the past eightdecades we have constantly reinvented ourselves and we have now begun laying thefoundation for our next decade of growth. Last year we spoke about ‘Building theFuture Preserving Legacy' - we will stay true to that ideology as we undergo thistransformation.

In the preceding year we had enjoyed strong growth in our revenues and profitabilitybut a large part of this was driven by the rapid growth of our EPC business and wasaccompanied by negative operating cashflows. This had led to a significant increase indebt akin to many other companies in India. So we took a strategic call in early 2019 tofocus on fiscal consolidation and work aggressively on building a stronger balance sheet.This also necessitated reviewing our business models.

While we continued to drive growth in our Consumer Products business for the EPCbusiness we decided to focus on the execution of ongoing projects while adopting a morecalibrated-risks approach towards fresh bidding. As a result we have seen significantchanges in our Profit and Loss Account and our Balance Sheet during the year under review.

In FY 2019-20 we saw a decline in total revenue from operations to H 4977.09 crorefrom H 6673.14 crore in the previous fiscal year.

We recorded an EBITDA of H 259.56 crore. Our PAT declined to H (0.13) crore from H167.07 crore in FY 2018-19. This decline in revenues was on account of the strategicintent shared above and the decline in PAT was led by increased interest costs due to highdebt build-up. However the real measure of our performance lies in the sharpbalance-sheet turnaround delivered during the year. During the year your Companygenerated positive cashflow from operations at H 627.41 crore compared to a negativecashflow of H 601.92 crore in the previous year. Total debt reduced from H 1582.21 croreas on 31st March 2019 to H 957.15 crore as on 31st March 2020. We also raised our equitycapital through a successful rights issue thanks to your participation. Consequent to allthese actions our debt- equity ratio showed a remarkable improvement from 1.47 as on 31stMarch 2019 to 0.69 as on 31st March 2020. Given the sudden outbreak of COVID-19 towardsthe end of the year all these fiscal measures and improvements proved to be extremelyuseful and hold us in very good stead to brace the post COVID-19 economic impact.

Our Consumer Products segment continued to deliver healthy doubledigit growth ahead ofindustry growth implying an increase in overall market shares. This was achieved througha strong focus on our product portfolio with several new launches as well as a very robustgo-to-market approach.

We have continued to push growth across all distribution channels viz. general trademodern format retail e-commerce and institutional and government business. Our mostvaluable asset remains our brand especially in the modern pull-based hyper-competitivemarketplace. Recognising this we have also embarked upon a fresh and a renewed push forvarious brandbuilding initiatives. This includes our new brand vision: "Open NewLife".

For our EPC segment our strategic priority remains the execution of current projects.We have continued to make healthy progress on that front across various PowerDistribution projects in India.

Our Power Transmission business continued to grow at a steady pace and achievedmultiple milestones. This includes the construction of the longest 400 kV TransmissionLine on Monopoles and the successful testing of 5 types of in-house designed monopoles forfour different clients demonstrating our in-house ‘concept to commissioning'capabilities. In order to maintain our advantage in this segment we have built adedicated team of engineers designers and marketing officers along with investments instate-of-the-art manufacturing units equipped with latest machinery and innovativeprocedures required for critical manufacturing processes.

Our Illumination business continues to maintain its dominating position across varioussub-segments such as street lighting industrial lighting and commercial lighting. Withevolving consumer preferences we strongly emphasised on connected and smart solutions.

Our robust end-to-end capabilities under one-roof right from R&D production andsupply to execution and services enabled us to stay ahead of our peers. During the yearunder review we completed the architectural illumination of the prestigious Bogibeelrail-cum- road bridge. It is India's longest and Asia's second longest rail-cum- roadbridge spanning over 4.94 km over the mighty Brahmaputra River in Assam. This project washighly appreciated globally and was recognised with the ISA - International Solid StateLighting Alliance SSL Top 100 Award in 2019.

While our businesses continue to evolve and progress the true foundation for our nextdecade of growth is being laid through a comprehensive Organisational Transformation. Wehave initiated multiple initiatives in this regard.

We are strengthening our talent pool including at the senior most levels with theinduction of key senior executives. We are revamping various processes and systems acrossthe Company to drive more collaborative responsive robust and secure operationalperformance. We have also recently implemented and launched SAP Success Factors a keyplatform to support our people practices. We are in the process of revamping ourPerformance Management Systems to build a best-in-class high performance framework.

And above all we are weaving together a strong organisational culture that binds ourpeople and channelises their energy and talent to deliver exceptional growth for theCompany. I believe all these transformative initiatives will equip us with greater agilityand resilience driving us to ensure excellence across our operations.

While we drive our business and organisation we have always been proud of our valuesand contributions to society. Through our CSR activities we strive to contribute towardsa holistic development of society at large with an emphasis on environment educationhealthcare community development and promotion of art and culture. We also inspire ourpeople to contribute towards the upliftment of society through participation in variousactivities and initiatives and encourage them to offer monetary contributions wherevernecessary.

As the last fiscal came to a close we have all faced major challenges posed by theCOVID-19 outbreak and the subsequent nationwide lockdown. This has impacted the economy aswell as business performances in the last quarter of the year and is expected to affectperformances in FY 2020-21. However we have braced ourselves for it and our teams havebeen efficiently responding to it. This is a testimony to the agility that we aredeveloping as an organisation. So while the environment remains challenging I amconfident that we as an industry and as a company will recover faster relative to manyothers. And even as we address the short-term cautiously we shall remain firmly focusedon our longer term strategic objective of driving growth.

I would like to acknowledge and thank our entire management team employees andbusiness associates for all their contributions and efforts and for being a part of thistransformative journey. I specially take this opportunity to thank our Executive DirectorAnuj Poddar for his contributions to Bajaj Electricals' transformation journey. Finallyto my colleagues on the Board your support and guidance is invaluable for the Company.Most importantly I remain grateful to you our shareholders and as we embark on ourjourney to the future we all remain committed to continuously deliver value to you.

Yours sincerely

Shekhar Bajaj

Chairman & Managing Director

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