On Wednesday, Bajaj Electricals Limited (BJE:IN) experienced a change in stock rating as ICICI Securities adjusted its position on the company's shares. The firm downgraded the stock from Add to Hold, also reducing the price target from INR 1,050.00 to INR 1,000.00. This revision follows the company's latest performance and market observations.
The downgrade was prompted by a mix of factors affecting Bajaj Electricals. After a tough fiscal year 2024, the consumer products division saw a revenue increase of 3.7% year over year, with summer products driving the growth.
However, the kitchen appliances segment continued to show weakness due to soft consumer demand, although there is potential for recovery in the second half of fiscal year 2025.
ICICI Securities noted early signs of demand revival in the rural market, which is significant for Bajaj Electricals as the company derives a higher portion of its revenue from these areas and has a strong market position. The firm is also working to boost its premium segment offerings, especially in the fans category.
The company's performance in alternate sales channels was a highlight, with e-commerce and modern trade channels reporting double-digit revenue growth year-over-year. General trade is also showing signs of improvement with a 3% increase year-over-year.
These factors contributed to the decision to revise the earnings forecast for fiscal years 2025 and 2026 by 13.2% and 16.5%, respectively. This led to the new hold rating and adjusted price target based on a discounted cash flow (DCF) analysis. The new target implies a price-to-earnings ratio of 57 times the fiscal year 2026 earnings estimate.
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