Reduce Bajaj Electricals; target Rs 325: Kotak Securities

Written By Unknown on Kamis, 10 Juli 2014 | 16.02

Kotak Securities has recommended a reduce rating on Bajaj Electricals with a target price of Rs 325, in its July 10, 2014 research report.

Kotak Securities' report on Bajaj Electricals

"BAEL reported 19 % YoY revenue growth at Rs 40.2 bn in FY14 on account of execution of loss making orders in E&P business. On account of this, it reported loss of Rs 53 mn in FY14. Consumer durable business reported retarded growth and margin erosion in FY14. Operating margins dropped in consumer/lighting. We believe that there has been some improvement in consumer sentiment however expects consumer business to experience slowdown over the next few quarters."

"We believe that margins in E&P business have bottomed out and BAEL would likely report recovery through 2HFY15-FY16. Current E&P order book is well diversified within various segments and could contribute significantly to company's profit in FY16. In view of downside to our target price we maintain 'REDUCE' recommendation on company's stock with DCF based revised price target of Rs 325 (Rs 310 earlier)", says Kotak Securities research report.

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To read the full report click here


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