Bajaj Electricals Limited (NSE: BAJAJELEC) Q1 2026 Earnings Call dated Aug. 07, 2025
Corporate Participants:
Unidentified Speaker
Dhruv Jain — NA
SHEKHAR BAJAJ — Chairman
SANJAY SACHDEVA — Managing Director & CEO
Vishal — NA
Rajesh — NA
Analysts:
Unidentified Participant
Aniruddha Joshi — Analyst
Achal Lohade — Analyst
Natasha Jain — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Bajaj Electrical Limited Q1 and FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Dhruv Jain from Ambit Capital Pvt Ltd. Thank you. And over to you sir.
Dhruv Jain — NA
Thank you. Hello everyone. Welcome to Bajaj Electrical’s 1QFY26 earnings call. From the management side today we have with us Mr. Shekhar Bajaj, Chairman of the company, Mr. Panjay Sa, MD CEO Mr. E.C. prasant, CFO of the company Mr. Vishal Chatta, CEO Consumer Products Mr. Rajesh Nair, CEO of Smiting Solutions. Thank you. And over to you sir for your opening remarks.
SHEKHAR BAJAJ — Chairman
Thank you very much, Dhruv. Good evening ladies and gentlemen. I’m Shekhar Bajaj, Chairman of the company. Thank you for attending our Q1 earnings call. We hope you had an opportunity to review our financial results and earnings presentation which are available on the stock exchanges. I would also like to extend a heartfelt gratitude to all our shareholders who attended the agm. Your continued trust, engagement and participation are truly appreciated and form the cornerstone of our journey forward. First quarter FY26 was marked by significant volatility and shifting market conditions. The electrical and consumer durable sector started the quarter with cautious optimism, expecting an economic recovery and a strong summer season.
However, the industry encountered a series of unexpected disruptions. Instead of intense summer heat seen in 2024, the country experienced early and unseasonal rain in May, cutting the summer short. The premature onset of unseasonal rain in May disrupted the anticipatory trajectory of consumer demand. This sudden change of weather disrupted expected consumer demand, affected sales plans and caused issues with inventory and supply chain readiness. It also dampened retail momentum leading to a cautious pause in both consumer activity and trade confidence during the latter half of the quarter. In spite of such high volatility in the electrical and consumer durable sector.
While our seasonal business and consumer products performance was affected by our non seasonal business has done considerably well. Further, our Nightingale Solutions vertical has delivered a standout performance of this quarter delivering a highest ebit margin of 10.6%. This not only reflects the strength of our portfolio diversification but also underscores our ability to respond with agility and precision in the complex market environment, we remain confident in our strategic direction and the evolution of our business model. With continued focus on operational excellence, innovation and market responsiveness, we are well positioned to navigate short term headwinds and unlock sustained value for our stakeholders.
I now hand it over to Sanjay Sardev, IMD and CEO for detailed business and financial highlights. Thank you.
SANJAY SACHDEVA — Managing Director & CEO
Thank you Chairman Good evening ladies and gentlemen and thank you for joining our investor call. As Chairman explained, this quarter has been marked by considerable volatility particularly in consumer demand patterns. To explain the results how this quarter it is necessary to understand the business model in more detail. Firstly, I would like to highlight to everyone on the call that the summer of 2024 which was last year was exceptionally intense leading to near stockhold situations across industries in categories such as air coolers, including us. These insights and learnings are factored in our inventory planning, demand forecasting, investment planning.
This year, however, unexpected shift in climate conditions significantly disrupted supply chain dynamics impacting consumer preparedness and ultimately affected overall sales performance. Secondly, our business model is more centric towards seasonal products with fans and coolers being seasonal heavy in Q1 and water and heaters coolers water and heaters being seasonal heavy in Q3 and Q4. While the overall seasonal revenues were down in high double digits, the non seasonal revenues were up in high single digits. Seasonal products like fans and coolers were heavily impacted thereby creating a drag on overall performance. We saw around 45% degrowth in coolers for example and double digit decline in fans.
On the other side the non seasonal products have done well. As I said we have high double digit growth in most of the categories there. When we see from this lens it is clear that seasonal products bore the brunt of the early onset of monsoon and this we strongly believe is a one off trend for this fiscal year. In spite of the volatility in the market dynamics, the lighting solution vertical has done exceptionally well. Not only it has delivered a single digit value growth but also improved ebit margins to 10.6% as Chairman said, which is the highest ever EBIT since we crafted a separate vertical in 2022.
Further, consumer lighting witnessed double digit value growth. In general trade we have improved our share in high margin and value creative products like ceiling and outdoor lights, professional lightings have also delivered good growth and we expect the same to continue in near future. It is worthwhile to note that our brand investments for this quarter were high at 4% versus approximately 3% last year. Our next year next few quarters our focus will to increase top line improve market Share continuing to spend heavily on the brands and other initiatives like revamp, go to market, digitalization, manufacturing efficiencies et cetera.
Lastly, we would like also want to highlight the core fundamentals of business model which is a strong brand, strong primary and secondary distribution, better products and lastly trustworthy after sales. Our brand investments will continue will be in both above the line and below the line. Our distribution will keep getting stronger as we calibrate the same our products NPD will contribute close to 40% offer revenues and we continue to invest behind after sales service in order to ensure they remain best in class. All these fundamentals remain strong and would not be affected by one off seasonal impact now coming to numbers and other strategic initiatives we delivered a EBIT of 2.5% at the company level mainly due to higher EBIT in the lighting solutions vertical.
The drop in EBIT is due to the operating deleverage. However our balance sheet continues to remain. Strong. As you would have noticed on the exchange filing. In our continuous effort to foray into adjacencies and leverage our existing distribution channel as a first step we are entering into Switchgear products under a lighting solution vertical. This is going to be synergistic to our existing business as we will be leveraging our existing go to market structure. We are very positive that about this segment expect it to help us strengthen our business model in lighting. We have taken an in principle approval of restructuring our nilib business which currently has a drag which currently has a drag on our financial results.
With this I would like to open the call for questions. Thank you.
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aniruddha Joshi from icici. Please go ahead.
Aniruddha Joshi — Analyst
Yeah, thanks for the opportunity. Just wanted to understand within France if you can share more details which segment which region has been affected more east, west, north and within that also as we understand from channel check that TPW is relatively more affected. So is that assumption also correct? Means TPW is more effective than saf. Lastly any channel related impact here means I guess MFI channel has been doing poorly for us for I guess some quarters now. So is there any channel LED impact also which is there in the numbers? And lastly what is the inventory as on the let’s say excess inventory on the books at the end of June quarter or even at the end of July.
Yeah, thanks.
Vishal — NA
So many questions Vishal here. I will first answer the impact and. Yes, you are right. The TPW fans got impacted significantly higher than the ceiling fans business for us and our dependence on TPW is stronger. In the regions of east and south. And that’s where the impact was felt. The highest. As far as the. So just to give you, you know, inventory is not in that precarious condition as far as we are concerned. And cooler advanced billing in July has already started off well. So we don’t foresee any major issue as far as inventory buildup for coolers is concerned.
Aniruddha Joshi — Analyst
Okay. And in terms of are there any. Additional initiatives the company has taken as far as selling means higher trade commissions or higher discounts to the influencer that is electricians or any additional consumer offer?
Vishal — NA
No, nothing like that.
Aniruddha Joshi — Analyst
Oh sure sir. Okay, thank you.
operator
Thank you Participants Mother star and one to ask the question. The next question is from the line of Mr. Achal Lohade from Nuama Institutional Equities. Please go ahead.
Achal Lohade — Analyst
Thank you for the opportunity. My question is first in terms of the, you know, the foray into Switchcares. So if you could just give your broader thoughts about this. What kind of capital deployment, what kind of revenue mix can we look at and how much of our channel is actually an overlap here for the switchgear business and will this be only switchgear or we will also look at switches from beginning itself.
Rajesh — NA
So this is Rajesh here and to be very open in terms of what we are trying to foray into is mostly a residential segment where we are strongly present through consumer lighting channel and we are not looking at MV or HV three years. So it is actually adjacency to our standard channel which is and where the brand is strong and our reach is much higher. So that is where we want to start with. And I will not be able to give you the forecast in terms of what is the percentage of mix which will come in.
But yes, we are looking at the industry size. We can see in near future it can contribute to the 10 15% minimum contribution coming from.
Achal Lohade — Analyst
Sorry data here. This 10 15% of the lighting can come from this segment. Have I understood that now we are.
Rajesh — NA
Just starting so we will get some idea in terms of acceptance what are the mix which we want to drive and then we are targeting at least 1015 percent by this financial year and.
Achal Lohade — Analyst
Given this is typically a high margin segment, does it mean that this will be margin accretive or you think it will be an issue? And the source thing, if you could highlight, you know, would we be investing in the manufacturing? What kind of capital expenditure or capital deployment are we looking at in this segment?
Rajesh — NA
As of now we are calculating to maintain the margins as a similar limit.
Vishal — NA
So Achal initially. Initially, initially what we’ll be focusing on. Is capturing some of the markets. So it’s not so much about margins. So we would like to maintain the same margin. And as already said by Sanjay and chairman sir, that the margins this quarter has been very healthy for lighting and we would like to maintain that. As you rightly said, this is a very margin accretive product. But initially we would like to capture the market. So that’s how we look at it.
Rajesh — NA
Also. One more point, that we are not planning to do any major investment in this area will be mostly sourcing from outside.
Achal Lohade — Analyst
Understood? Understood. And sir, on the NILIP part, if you could give us some sense as to what has happened, what, what challenges are we facing and what is the way out here?
Vishal — NA
So NILAB is a totally different GTM and we have realized that instead of focusing on too much of, you know, different spaces, it is better to consider on our code because NIRLEP is a totally different go to market. There is no synergy and the factories of nerve were making losses. So that is the reason we thought it is best to look at alternatives and concentrate on the core.
Rajesh — NA
So no cooker. No cooker. In that case, have I understood right?
Vishal — NA
You will continue with the Kukar and the Bajaj brand. What we are saying is that we will be looking at coordinators for the Nidaleb brand.
Achal Lohade — Analyst
Understood? Is there any one off in terms of expenses? And just last question if I may. With respect to how do we go from here on? We have seen market share losses in the past and seems that we have continued to lose the market share even the last quarter. How do we see it from here on? If you could give some directional thoughts on this please.
Vishal — NA
Which category are you saying?
Achal Lohade — Analyst
So let’s say for fans or a water heater or kitchen appliances.
Vishal — NA
So Ashal, I think there has been a positive momentum in this quarter as far as the market share is concerned across all the categories.
Achal Lohade — Analyst
Okay, so you’re saying basically plans for the industry has declined in double digits. Have I understood right?
Vishal — NA
Yes.
Achal Lohade — Analyst
Okay, understood. And just a direct in terms of growth.
Vishal — NA
I didn’t get you clearly.
Achal Lohade — Analyst
So in terms of the, you know, growth outlook from here on, you know, given we are talking about improvement in the rural sentiment given the robust monsoon and also the Dubai. How do you see it for us?
Vishal — NA
Very difficult to comment. It all depends on how the season plays out. So we are all looking at this festive season very keenly and probably once you see a good purchase season then we can comment on that. But after having seen Q1, I think we cannot comment on what the year is going to look like.
Achal Lohade — Analyst
Got it. And just last clarification if I may sir, what is the exposure to products which are sold predominantly in the flexible time, if you could give some sense, is it 25, 30% or is it 50, 60 to kind of.
Vishal — NA
So we’ll come back to you. I don’t have the figures ready so. I’ll get back to you.
Achal Lohade — Analyst
Sure. Thank you so much.
operator
Thank you. Before we take the next participant, we would like to remind the participants to press star and one to ask a question. The next question is from the line of Natasha Jain from Philip Capital. Please go ahead.
Natasha Jain — Analyst
Thank you for the opportunity. Sir, I have two questions. First one, in terms of your consumer product segment, your presentation mentioned that you had double digit growth in water heaters. Just trying to understand is this predominantly because of a shorter summer or is there a trend change where we’re seeing that products like a geyser water heater has now become a round year product and not just a winter product. The first question is that.
Vishal — NA
So our guess estimate on this is that it’s because of the early onset of monsoon. And typically the sales of water heaters. Do tend to pick up during that period. So that’s been a reason for the positive momentum also.
Natasha Jain — Analyst
Got it. So would that mean that water heaters probably going down the line may not see that stronger growth in the appliance category or we expect the momentum to continue?
Vishal — NA
It really depends on as EC just explained the previous question that it all depends on how the season pans out and we remain cautiously optimistic.
Natasha Jain — Analyst
Question in terms of lighting, you have mentioned that you had single digit volume growth and double digit value growth. So just trying to understand are we behind in terms of the entire price deflation that is taking place and because we’ve premiumized here or gotten better products, the value deflation is not impacting us because if I see the peers numbers, even the largest premium peers in the industry, they saw a margin decline primarily because of price deflation. So if you can understand on those trends. Thank you.
Rajesh — NA
So industry has been seeing the price continues for some time and as I mentioned in the last call also it may continue for Next one or two quarters. But yes we have. We were driving our product mix which was more towards lamps and button which is almost like commodity and we were able to change our mix from the high premium products coming from sealing as well as outdoor lighting which has now improved from 14% to and because of which even the volume growth was not there. We were able to achieve double digit validity.
Natasha Jain — Analyst
Understood. So thank you so much and all the guys thank you.
operator
Thank you. The next question is from the line of Dhruv Jain from Ambit Capital. Please go ahead.
Dhruv Jain — NA
Thank you for the opportunity. My first question is on lighting. So you mentioned in your presentation that you’ve seen growth in consumer lighting. Just want to understand so then that basically means that. So just wanted to understand what’s happening on that front. How much of it really contributes in the overall it and how are you looking at the B2B writing side over the next safe in your social.
Rajesh — NA
If you see the major growth that come in consumer lighting and that too from the trade in. We are still having drag in the admin channels because of MFI which has not grown actually it is declined and that’s why the overall growth if you see is not in double digit. Otherwise if we would have got that MFI piece also running then you would have double digit growth also. But yes to talking about B2B we are seeing good traction there. A lot of infrastructure projects are coming in. We are in the very track for major projects and we see in next 2, 3/4 we should be able to shoot good growth in B2B segment.
We will not be able to give exact number for what percentage we will be doing with. But yes, there is a good traction and good expectation. Any order book that you like to. Share around 210 crores is the order book what we have.
Dhruv Jain — NA
In the B2B. Okay so my second question is on just. Just trying to understand this for Switch Care a little better. So Switch Care is not a category that we see that you know can grow beyond 8, 9%. At least one of the district peers under comments that it will not grow beyond 89 percentile. It is also a category that would require a lot of investment in terms of awareness of the brand and marketing. Right. So just trying to understand, you know how difficult it will be for Bajaj or how easy for Bajaj to scale up this vertical given the fact that port is not being the best and in this category and you know even though entrant, how are you thinking about this?
Rajesh — NA
Basically the thought behind entering this category was adjacency because we are not creating a separate vertical for this. We are using the current infrastructure in terms of our reach in terms of our people and distribution network which is currently operational in the market for consumer making and we are taking advantage of that. Yes, I agree there are few people who are growing much faster but it is again a big opportunity because of organization and lot of new buildings have new towns are coming up and that is where we thought we will be able to make impact because of our brand name as well as our network which is there, the consumer lighting as well as consumer products.
Dhruv Jain — NA
My first question is on the consumer product segment. So you know in this quarter we see that holders have strong what 40%. Now if you could just give a broad share of. So I don’t want to be impacting this but if you could give a broad share of what individual categories contribute as a percentage of revenue within the consumer product segment so that you can get a sense of how should we think about growth going forward.
Vishal — NA
So Dhruv, you don’t disclose the share of coolers as a total business. But having said that the market survey says that we are number two position back to number two position as well as the cooler is concerned.
Dhruv Jain — NA
Okay, just your last question on Capex. You know if you could just spell out what will be on CapEx for FY26 and FY27.
Vishal — NA
So we’ll be predominantly investing on new product development and you have already seen in March the budget approved is about 140 odd crores. So that’s going to be. And plus we are also evaluating the new factory and at the minute it comes up in the tumor.
Dhruv Jain — NA
Okay, thank you so much and.
operator
Thank you. Participants who wish to ask a question may press star n1 at this time to ask a question please press star and 1 now. I repeat, participants who wish to ask a question may press star and one at this time to ask a question please press star and one now. Participants who wish to ask a question may press star and one now in order to ask a question. Please press star and one now. Ladies and gentlemen, as there are no further questions from the participants I now hand the conference over to the management for closing comments.
SANJAY SACHDEVA — Managing Director & CEO
Thank you very much Dhruv and thank you for those 90 people who have participated in this conference. This quarter was not for me, it was not at all satisfactory. But there were circumstances which have been explained. We are hoping the next three quarters should be much stronger and at the end of the year you should be satisfied that we are improving everywhere. Thank you.
operator
Thank you on behalf of Ambit Capital Private Limited. That concludes this conference. Thank you for joining us, and you may now disconnect your lines.