OnlineEquityCalls.com

STCI Capital Markets has recommended ‘buy’ on Bajaj Electricals for a target price of Rs 485. Bajaj Electricals’ consumer products business model, forming more than 75 per cent of revenue, of outsourcing production provides protection to profitability with lower fixed costs in the event of slowdown in growth due to inflationary environment.

In engineering and project business, current order book and diversified revenue streams from telecom and transmission line towers, lighting projects and high masts and poles provides reasonable visibility of growth.

The company is having sizeable market share across its product lines. In appliances and luminaires SBUs, the company enjoys first position with 20 per cent share in each business. In fans and lights SBUs, the company is running close to competitors for second spot. In E&P segment, the company is the largest player in lighting projects business with 70 per cent share and high masts and pole business with 65 per cent share.

Revenue across all product lines have compounded in the range of 20-35 per cent over the last five years providing evenly spread out growth across SBUs.

Bajaj Electricals is leveraging its extensive distribution network of 5,000 dealers through tie ups with international majors. Joint venture with Morphy Richards has generated revenue of Rs 363.2 crore in 2007-08.

Last year the company entered into joint venture with Nardi for gas appliances and also with Helver controls for HVAC products, lighting control products and security products. For luminaires business, the company has joint venture with Trilux. The company entered into invertors business last year.

Net Sales and earning per shate are estimated to compound at a CAGR of 24 per cent and 16 per cent respectively during FY08-FY10.

Source : EconomicTimes

• ROCKET STOCK…. CELESTIAL LABS LTD at Rs.40/-; TARGET 125/-
• Bharat Heavy Electricals (BHEL) : Buy Recommendation
• Stocks in news: RIL, TCS, Hindalco, Dish TV
• Dont see huge upsides unless FII flows rise: PN Vijay
• Buy Texmaco with target of Rs 1800: G Shah
• Buy Kalpataru Power; Tgt Rs 1030: Karvy
• Buy Tata Steel; tgt Rs 1083: Emkay Global
• Buy Sterlite Technologies, target of Rs 216: KRChoksey
• Buy Transformers and Rectifiers (TRIL) For Long Term
• See Sensex around 16K by Dec-end: Kotak Securities

Tags: Bajaj Electricals, Buy, Inflation, Net Sales, ORDER, REC, recommended, RIL, Stock Recommendations, TRIL

 

Submit News Article

share & discuss articles that interest you. submit here !