Bajaj Electricals Limited — Q4 FY25 earnings call

Call held 12 May 2025

Management summary

Bajaj Electricals reported a strong Q4 FY25 performance with robust revenue and profit growth, primarily driven by the Consumer Products segment. The company achieved significant margin expansion and maintained a healthy balance sheet. Management outlined strategic priorities including brand focus, distribution improvements, and continued investment in R&D and premiumization, while also planning for a new manufacturing unit and international expansion.

Highlights

  • Q4 FY25 Revenue from operations: ₹1,265 crores, up 6.5% YoY.

  • Q4 FY25 Profit Before Tax: ₹71 crores, up 191% YoY.

  • Q4 FY25 Consumer Products revenue growth: 8.4% YoY.

  • Q4 FY25 Consumer Products EBIT: ₹39 crores, up 138% YoY.

  • Q4 FY25 Consumer Products EBIT margin: 3.9%, expanded 210 basis points.

  • FY25 Adjusted PBT: ₹148 crores, up 12.4% YoY (excluding one-time items).

  • Professional Lighting unexecuted order book: ₹248 crores.

  • FY25 Ad spend as % of sales: 3%, targeted to increase to 3.5%-4% for FY26.

Key financials

2 periods

Headline

  • Revenue
    ₹1,265 Cr
    YoY +6.5%
  • Profit Before Tax
    ₹71 Cr
    YoY +195.8%
  • Cash Flow from Operations
    ₹87 Cr
  • Surplus Funds
    ₹509 Cr

FY25

  • Adjusted PBT
    ₹148 Cr
    YoY +12.1%
  • Ad Spend % of Sales
    2.4%

What they filed

Q1 FY27: revenue up 2.3%, net profit up 4700.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,118 1,290 1,265 1,065 1,107 −1%1,051 −19%1,240 −2%1,089 +2%
EBITDA52 87 93 33 57 +10%8 −91%40 −57%77 +133%
Net profit13 33 59 1 10 −23%-34 −203%-68 −215%48 +4700%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentRevenue GrowthEBIT Margin
Consumer Products8.4%3.9%
Lighting Solutions0%7.8%

Guidance & targets

Profitability

  • Consumer Products EBIT Profitability · current year · Medium confidence around 6%
    And in the current year we will be targeting somewhere around 6%.

    — E.C. Prasad, CFO

  • Gross Margin savings from VAVE Profitability · going ahead · High confidence 2% to 3%
    So, going ahead also you can expect about 2% to 3% savings coming from VAVE

    — E.C. Prasad, CFO

  • Gross Margin improvement from price hikes Profitability · going ahead · High confidence 2% to 3%
    and also about 2% to 3% coming from the price hikes.

    — E.C. Prasad, CFO

Capex

  • Normal CAPEX Capex · this year · High confidence about Rs. 100-odd crores
    So yes, the normal CAPEX will be close to about Rs. 100-odd crores.

    — E.C. Prasad, CFO

  • Total CAPEX (with new factory) Capex · this year · Medium confidence Rs. 400 - Rs. 450 crores
    So if that materializes, the CAPEX would be in the range of Rs. 400 - Rs. 450 crores.

    — E.C. Prasad, CFO

Ad Spend

  • Ad spend as percentage of sales Ad Spend · next year · High confidence 3.5% to 4%
    Yes, full year is around 3% for the year. And next year, we plan to take it up so somewhere would be in about 3.5% to 4%.

    — E.C. Prasad, CFO

Channel Mix

  • Alternate channel contribution Channel Mix · going forward · Medium confidence 60:40 to 55:45
    Yes, it will be somewhere in the range of 60:40 to 55:45.

    — E.C. Prasad, CFO

EPR

  • EPR charge EPR · next year · High confidence about Rs. 18 crores
    So EPR for this year is about. Rs. 9.5 crores and last year also was similar. Going forward next year it will be a charge of about Rs. 18 crores.

    — E.C. Prasad, CFO

Market context

  • Consumer Products EBIT Profitability · next three years or so · Medium confidence double-digit
    So yes, we have aspirations, I think we have already given a guidance that would like to be a double-digit EBIT business in the next three years or so.

    — E.C. Prasad, CFO

  • EBIT (overall company) Profitability · next three to four years · High confidence double digit
    our margins should go up every year so that we should come to the level of double digit in next three to four years is our objective, our EBIT must go to kind of -

    — Shekhar Bajaj, Chairman

Risks & concerns

  • MFI (Microfinance Institutions) issue impacting distribution

    medium

    The MFI issue continues to affect distribution, with MFIs not operating at full steam, and is expected to impact Q1 FY26.

    Both acknowledged

  • Price erosion in Lighting Solutions (specifically Ceiling Lights)

    medium

    While Lamps and Battens categories have largely bottomed out, price erosion in Ceiling Lights is expected to continue for another one or two quarters.

    Both acknowledged

  • Delays in Professional Lighting order execution

    medium

    Degrowth in Professional Lighting was due to delays in order execution from urban local bodies, though clearances are now being received, with expectations for Q2 growth.

    Management acknowledged

  • War-like situation in North zone impacting consumer appliances growth

    medium

    A 'war-like situation with Pakistan' had an impact, especially in the North zone, affecting consumer appliances growth, with uncertainty on how long the market will remain closed.

    Management acknowledged

Areas of evasion (1)

  • Consulting fees impact on P&L

Q&A highlights

3 direct
Continuation of MFI (Microfinance Institutions) issue impacting distribution Direct
So, Aniruddha, that continues. I mean, we still have an issue on the MFI front, MFIs have still not started going on full steam as it was earlier.

Highlights an ongoing external headwind affecting distribution, with no clear resolution timeline, impacting Q1 FY26.

Asked by Aniruddha Joshi

Sustainability of Consumer Lighting margins and revenue growth Direct
We continuously improve our first level margins with the product mix, and which has helped us to improve that by almost 2.5% (overall) in the FLM itself, which will continue, and we are driving the top categories or the product mix where higher margin products are being sold. So that should continue.

Clarifies the drivers of margin improvement in Consumer Lighting (product mix, not just price hikes) and confirms expectations for continued growth despite flat revenue this quarter.

Asked by Keshav Lahoti

Strategy for navigating heightened competition and lack of price hikes in the consumer durable industry Direct
So first of all, I do believe that premiumization is picking up. And I also do believe that price increases have been, to some extent, the norm. We have also taken the price increases this last year. And as EC was saying, there will be maybe another price increase this year.

Addresses a critical industry challenge, outlining management's multi-pronged strategy (premiumization, price hikes, category penetration, new categories) to drive growth and profitability in a competitive environment.

Asked by Natasha Jain

3 min read 7 chapters

Detailed narrative

Strong Q4 FY25 Performance Driven by Consumer Products

Bajaj Electricals reported a robust Q4 FY25, with revenue from operations growing 6.5% YoY to ₹1,265 crores, up from ₹1,188 crores in the prior year. Profit Before Tax surged by 191% YoY to ₹71 crores, compared to ₹24 crores in Q4 FY24. The Consumer Products segment was a key driver, achieving an 8.4% YoY revenue growth and a 138% increase in EBIT to ₹39 crores, with EBIT margins expanding by 210 basis points to 3.9%.

Full Year FY25 Performance and Adjusted Profitability

For the full fiscal year 2025, the company's adjusted Profit Before Tax (excluding one-time items) improved by 12.4% YoY to ₹148 crores, compared to ₹132 crores in FY24. This adjustment accounts for a one-time gain of ₹41 crores from income tax refund in FY24 and an exceptional net gain of ₹21 crores in FY25. The company also generated positive cash flow from operations of ₹87 crores in Q4 FY25, ending the quarter with ₹509 crores in surplus funds.

Strategic Focus on Brand, Premiumization, and Distribution

Management reiterated its strategic focus on strengthening distribution and product strategy through R&D investment and premiumization, centered around the Bajaj, Morphy Richards, and Nex brands. Initiatives like Project Vriddhi are driving scale, and the company is enhancing brand presence with digital engagement. The alternate channel currently contributes 40-45% of revenue, with a target to maintain this mix in the range of 60:40 to 55:45 (alternate vs. general trade) going forward.

Margin Expansion Levers and Outlook

Gross margins expanded by 3.6% in Q4 FY25, contributing to the overall EBIT margin improvement. The company expects continued margin improvement through VAVE (Value Analysis and Value Engineering) projects, anticipating 2-3% savings, and further price hikes, also contributing 2-3% improvement. The objective is to achieve double-digit EBIT for the overall company within the next three to four years, with a target of approximately 6% for Consumer Products EBIT in the current year (FY26).

Capex and International Expansion Plans

Bajaj Electricals plans a normal CAPEX of around ₹100 crores for FY26. Additionally, the Board has approved a principal amount of ₹300 crores for a potential new manufacturing unit, which if materialized, would bring the total CAPEX to ₹400-450 crores. The company is also expanding its international footprint with the approved incorporation of a wholly-owned subsidiary in UAE to tap into Middle East and other untapped markets.

Lighting Solutions Performance and Challenges

The Lighting Solutions business remained flat in Q4 FY25, primarily due to degrowth in Professional Lighting caused by delays in order execution from urban local bodies. However, the revamped GTM initiative led to a strong double-digit value growth of approximately 12% in general trade for Consumer Lighting. The unexecuted order book for Professional Lighting stands healthy at ₹248 crores, almost double last year, with expectations for good growth in Q2 FY26 as clearances are now being received. Price erosion in Ceiling Lights is expected to continue for 1-2 more quarters.

Ongoing MFI Impact and Ad Spend Strategy

The Microfinance Institutions (MFI) issue continues to affect distribution, with MFIs not operating at full steam, which is expected to impact Q1 FY26. Despite this, the company's brand spend remained consistent at 2.4% of sales in FY25 (compared to 2.5% in FY24), with plans to increase it to 3.5-4% in FY26 across all business segments to further enhance market share. The company also noted a 'war-like situation with Pakistan' impacting the North zone, affecting consumer appliances growth.

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