India's Bajaj Electricals posts plunge in Q2 profit on weak demand, stiff competition

Bajaj Electricals

06/11/2023 11:32

BENGALURU, Nov 6 (Reuters) - India's Bajaj Electricals
 BJEL.NS  posted a 56% fall in its second-quarter profit on
Monday, hurt by pricing pressures due to stiff competition and
muted demand caused by a delayed festive period.
    Its consumer products business, which includes appliances
like grinders and microwaves and constitutes more than
three-fourths of the total revenue, contracted by 2.9%
year-on-year while its lighting business fell 7.4%.
    Chairman Shekhar Bajaj, in a statement, blamed weak consumer
demand and pricing constraints for the fall in the revenue in
both businesses.
    The kitchen appliances industry is witnessing heightened
competitive pressure with the entry of fast-moving electric
goods players with aggressive price points, forcing traditional
players to resort to heavy discounts.
    Margins in the consumer products unit were "under pressure
due to price discounting in a weak environment", the company
said in its earnings presentation.
    Bajaj Electricals' consolidated net profit fell to 272.8
million rupees ($3.28 million) in the July-September quarter,
from 620 million rupees a year earlier.
    The festive season, when most Indians splurge, including on
electronic items, was also delayed by a month to October this
year, hurting sales in multiple consumer-facing firms.
    As a result, the Mumbai-based company's revenue from
operations fell nearly 4% to 11.12 billion rupees.
    Bajaj Electricals shares dropped as much as 4.6% after the
results, but recovered to close up 0.5%.
 
 ($1 = 83.2100 Indian rupees)

 (Reporting by Ashish Chandra in Bengaluru; Editing by Savio
D'Souza)
 ((ashish.chandra@thomsonreuters.com; +91 7982114624;))