Bajaj Electrical falls in PAT; Know why its still shining

Bajaj Electrical reported its third quarter result for the fiscal year 2019-2020 today, in which its operations revenue dipped by nearly 41 per cent YoY to Rs 1,281.5 crore in Q3FY20. The consumer durable segment reported nearly 13 per cent YoY increase in revenue.

However, in-line with the management’s aim to reduce the share of Engineering, Procurement, Construction (EPC) business, the company’s EPC revenue fell by nearly 70 per cent YoY to Rs 423.5 crore (33 per cent revenue share vs ~65 per cent in Q3FY19) while, its EBITDA for the quarter dipped by almost 50 per cent YoY to Rs 68.4 crore. The margin contracted by nearly 100 bps but the higher share of consumer durable acted as a cushion resulting in EBITDA margin of 5.3 per cent in Q3FY20.

Net profit for Q3FY20 plummeted nearly 76 per cent YoY to Rs 15.46 crore.

The company earlier had highlighted that it aims to bring down the overall share of EPC business and targets to focus on the bidding for high-margin projects with a low working capital cycle. Further, the management is focussing on debt reduction and generating a positive free cash flow.

With this, the stock of Bajaj Electrical surged on the bourses by almost 12 per cent to touch an intraday high of Rs 420.75 apiece.