Bajaj Electricals Limited — Q4 FY26 earnings call

Call held 26 May 2026

Management summary

Bajaj Electricals reported a modest Q4 FY26 performance, primarily impacted by a weak summer season and inflationary pressures affecting the Consumer Products segment, which reported a loss. However, the Lighting Solutions segment delivered strong growth and margin expansion. The company is focusing on innovation, brand building, and addressing market share gaps in fans, while maintaining a strong cash position and negative working capital.

Highlights

  • The Lighting Solutions segment demonstrated strong performance, with EBIT increasing by 28% year-on-year and achieving an annual EBIT margin of 8.5%. Q4 revenue growth for this segment was 16% with an 8.7% EBIT margin.

  • Within Consumer Products, kitchen appliances, induction cooktops, and mixers performed well, with kitchen appliances growing almost 30% year-on-year.

  • The company generated INR 934 crores of cash from operations and is operating with negative working capital, providing strong financial flexibility.

  • Successfully entered the wires category, which has seen a robust market response and encouraging demand trends.

Concerns

  • Overall performance for the quarter was 'modest' due to a milder start to the summer season, geopolitical uncertainties, supply chain disruptions, and input cost pressures.

  • The Consumer Products vertical reported a loss in Q4 due to operating deleverage and bore the brunt of a weaker start to summer.

  • The company lost market share in fans, particularly in the BLDC segment, and still has elevated inventory levels for coolers requiring correction.

  • War-related inflation and demand uncertainty make it difficult to pass on all cost increases, impacting the ability to achieve prior margin levels for Consumer Products.

Key financials

  1. Cash from Operations ₹934 Cr

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

  • Lighting Solutions
    16% Q4 Revenue Growth8.7% Q4 EBIT Margin9.5% Annual Turnover Growth8.5% Annual EBIT Margin
  • Consumer Products
    30% Kitchen Appliances Growth— Q4 Performance

Capital allocation

high confidence
  • Dividend ₹3/share (final)
    Further, in celebration of 100 years of Bajaj Group, the Board of Directors have decided to maintain a dividend rate same as last year and accordingly approved - recommended a final dividend of INR 3 a share, that's 150% of face value of INR 2 each on equity shares for the financial year ending 31st March 2026.
  • Liquidity Cash ₹934 Cr Company is operating at negative working capital, providing strong financial flexibility.
    We continue to generate positive cash flow from operations and are ending the year with INR 934 crores of cash. We are operating at negative working capital.

Guidance & targets

Capex

  • Capex intensity Capex · Next 2 years · Medium confidence Substantially come down (less than half of past)
    Next capex will substantially come down. It will be less than half what we have been doing in the past. So it will be mainly for replacement of moulds or in some cases on innovations; we're going to use capex wherever it is necessary. But the intensity of the capex investments will come down as we move forward to the next 2 years.

    — Sanjay Sachdeva

Profitability

  • Overall Profitability (Industry Average) Profitability · Going forward · High confidence 6-9%
    Our intent is to make industry average, at least industry average profit and industry average is between 6 to 8%, 9%, and that is where it should be.

    — Sanjay Sachdeva

Growth

  • Overall Growth Rate Growth · Going forward · Medium confidence More than mid-single digit market growth
    our intent going forward is to grow ahead of the market... market will grow close to mid-single digit. So therefore, we our growth rate should be more than that.

    — Sanjay Sachdeva

Consumer Products

  • Consumer Products vertical performance Consumer Products · Next financial year · Medium confidence Bounce back
    However, we expect the vertical to bounce back in the next financial year.

    — Shekhar Bajaj

  • Consumer Products vertical turnaround Consumer Products · Next quarter · Medium confidence Turn around loss
    For the quarter, the vertical reported a loss due to operating deleverage. We are, however, confident of turning this around as we go forward next quarter.

    — Sanjay Sachdeva

Fans

  • BLDC gap Fans · Next 12 months · High confidence Bridge the gap
    The segment which is growing is BLDC and this is where we have gaps. In the next 12 months, our plan is to bridge this gap.

    — Sanjay Sachdeva

Working Capital

  • Negative working capital Working Capital · Next year · High confidence Maintain
    So we have been operating at negative working capital for the past 2 years, and we the expectation is to continue on those same lines for the next year as well, and we endeavor to achieve that as well.

    — Suketu Shah

What to watch in Q1 FY27

Consumer Products segment profitability

Next quarter
Current Reported a loss in Q4 FY26
Target Return to profitability

Why it matters

The Consumer Products segment is a key part of the business, and its return to profitability is crucial for overall company performance.

For the quarter, the vertical reported a loss due to operating deleverage. We are, however, confident of turning this around as we go forward next quarter.

Risks & concerns

  • Modest overall performance due to external factors

    high

    Milder start to summer, geopolitical uncertainties, supply chain disruptions, and input cost pressures led to modest performance.

    Management acknowledged

  • Consumer Products segment loss and underperformance

    high

    The Consumer Products vertical reported a loss due to operating deleverage and a weaker start to summer.

    Management acknowledged

  • Market share loss in fans, particularly BLDC

    high

    The company has lost market share in fans, primarily due to underperformance in the BLDC segment where industry contribution is higher.

    Management acknowledged

  • Elevated inventory for coolers

    medium

    While overall inventory is largely corrected, coolers still have elevated levels requiring further correction.

    Management acknowledged

  • War-related inflation and demand uncertainty

    medium

    Inflationary pressures and demand uncertainty make it difficult to pass on all costs and achieve desired margins, requiring calibrated pricing.

    Management acknowledged

Q&A highlights

3 direct, 1 evasive
Capex plan for FY27 and FY28 Partial
Next capex will substantially come down. It will be less than half what we have been doing in the past. So it will be mainly for replacement of moulds or in some cases on innovations; we're going to use capex wherever it is necessary. But the intensity of the capex investments will come down as we move forward to the next 2 years.

Analyst sought specific capex numbers, but management provided qualitative guidance on reduction and purpose.

Asked by Shivam Patel

Individual performance of Consumer Products (Fans, Appliances) and Lighting (wires, switchgears) Partial
kitchen appliances... delivered a very good, almost 30% growth over last year's same quarter... Coolers being a seasonal product and with the onset of -- a delayed onset of summer has shown a degrowth and a similar trend has been observed in fans also... Professional Lighting has also grown and Consumer Lighting in trade has grown. Two categories what we recently launched in that, wires was like in February.

Analyst requested segment-level performance breakdown, and management provided specific growth figures for some sub-categories and general trends for others.

Asked by Shivam Patel

Consumer Products EBIT Margins Outlook Evasive
Difficult to say exact margin, and I tell you why because there is another factor which is affecting the cost of our products is the war-related inflation. Not everything we'll be able to pass on because we have to see we are trying all the possibilities of leveraging our supply chain network or stepping up savings. But we are using all the levers to see that we deliver a good margin.

Analyst pressed for a return to prior margin levels (3-3.5%), but management cited inflation and competitive pressures making it difficult to commit to specific numbers.

Asked by Arun Agarwal

Exceptional Items Going Forward Partial
I think so far, all that we could trace and whatever we could find certain issues, I think we have taken care of that. And we hope that we have a good year on next year.

Analyst inquired about the recurrence of exceptional items, and management expressed optimism that past issues have been addressed.

Asked by Arun Agarwal

Fans Market Share and BLDC Scale-up Direct
on the fans market share, we have lost a bit of market share. And primarily, the reason behind that is that we are still not as good on our BLDC performance as we would like it to be... The segment which is growing is BLDC and this is where we have gaps. In the next 12 months, our plan is to bridge this gap.

Management directly acknowledged market share loss in fans due to BLDC underperformance and outlined a clear plan to address it within 12 months.

Asked by Natasha Jain

Innovation and its impact on growth/margin trajectory Direct
our intent going forward is to grow ahead of the market... market will grow close to mid-single digit. So therefore, we our growth rate should be more than that. Our intent is to make industry average, at least industry average profit and industry average is between 6 to 8%, 9%, and that is where it should be.

Analyst questioned the effectiveness of past innovation investments, leading management to articulate future growth and profitability targets tied to new innovation strategy.

Asked by Manoj Gori

Channel Inventory and Summer Demand Outlook Direct
corrected the channel inventory to a large extent. But there are still some categories like summer products, coolers specifically, where they are still at a slightly elevated level... In this quarter so far, there has been a mixed bag of summer as well as unseasonal rains.

Analyst sought clarity on inventory levels and the impact of summer demand, which management clarified as largely corrected but mixed for coolers and overall summer season.

Asked by Manan Goyal

2 min read 6 chapters

Detailed narrative

Q4 FY26 Performance Overview and Challenges

Bajaj Electricals reported a 'modest performance' for Q4 FY26, primarily attributed to a milder start to the summer season, geopolitical uncertainties, supply chain disruptions, and input cost pressures. The Consumer Products vertical bore the brunt of these challenges, reporting a loss due to operating deleverage. Despite these headwinds, the company remains cautiously optimistic about the long-term outlook, focusing on delivering steady and profitable growth.

Strong Performance in Lighting Solutions Segment

The Lighting Solutions vertical delivered a strong performance, with EBIT increasing by 28% year-on-year. For Q4 FY26, this segment achieved 16% revenue growth and an EBIT margin of 8.7%. Annually, the Lighting Solutions segment's turnover expanded by 9.5%, with an EBIT margin close to 8.5%, marking its highest-ever annual EBIT margin. The company also successfully entered the wires category within this segment, which has seen a robust market response.

Consumer Products Segment: Mixed Results and Turnaround Strategy

The Consumer Products vertical experienced mixed results, with kitchen appliances, induction cooktops, and mixers showing strong performance, including almost 30% growth for kitchen appliances. However, the segment as a whole reported a loss in Q4 due to operating deleverage and a weaker start to summer. Management is confident in turning this segment around in the next quarter and expects it to bounce back in the next financial year, addressing long-term issues and normalizing stock levels, except for fans where more work is needed.

Capital Allocation and Liquidity Position

The company ended the year with a strong liquidity position, generating INR 934 crores of cash from operations and operating with negative working capital. This financial flexibility supports future growth initiatives. For shareholder returns, the Board recommended a final dividend of INR 3 per share for FY26, representing 150% of the face value. Capex intensity is expected to substantially decrease over the next two years, focusing mainly on replacement and innovation.

Strategic Focus on Innovation, Brands, and Market Share

Bajaj Electricals is committed to enhancing innovation and brand-building exercises, planning increased investment in these areas over the next 12 months. This strategy aims to introduce innovations at the right price point with adequate margins, without diluting the overall P&L. The company acknowledged losing market share in fans, particularly in the BLDC segment, and plans to bridge this gap within the next 12 months to accelerate growth in this category.

Outlook on Growth and Profitability

Management intends to grow ahead of the market, targeting a growth rate higher than the mid-single digit market growth. The goal is to achieve industry-average profit margins, which are typically between 6% to 9%. While war-related inflation and demand uncertainty pose challenges to passing on all cost increases, the company is leveraging supply chain networks and focusing on sustainable margins through competitive pricing and strategic investments.

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