Mumbai: Bajaj Electricals expects some fresh orders to come by in a few weeks, but has scaled down its revenue target for FY12 a bit on account of sluggishness in the engineering and projects (E&P) business, a senior official told Reuters.
“Probably because of E&P slowdown I would say about Rs 3,300 crore,” said R. Ramakrishnan, executive director, Bajaj Electricals, when asked about revenue target for 2011-12.
In January, another senior official of the firm said it aimed to clock turnover of Rs 3,500 crore during FY12.
If the target is achieved, the revenue growth would be 20.5% for the Mumbai-based firm, which makes appliances, lighting products, fans, luminaires. In FY11, it had clocked a revenue of Rs 2,739 crore.
In July-Sept, Bajaj Electricals posted an 8% rise in its net profit to Rs 249.9 million, on net sales of Rs 690 crore that grew 19%. A Reuters poll of brokerages had estimated net profit at Rs 219.50 million.
During the quarter, revenue from the lighting and consumer durable segments had shown a growth of 25% and 21.3%, respectively, while the E&P segment has registered a growth of 9.5%, the firm said in a statement.
“I would expect rural demand to do well... Bajaj Electricals is uniquely poised because we are in so many segments and we have a pipeline of interesting opportunities,” Ramaskrishnan said.
The firm, which currently has four-five exclusive showrooms on a franchisee basis selling its own branded appliances, will grow them to 50 by 2013-14, he added.
As of 30 September, Bajaj Electricals has an order book position of Rs 626 crore in the E&P segment, compared with Rs 1,050 crore at the beginning of 2011.
“The government is not taking decisions. There is a paralysis, so unfortunately that is affecting creation of further order book,” said Ramakrishnan adding the E&P segment will improve in the fourth quarter.
“In the next two weeks, we are expecting further order inflow of about Rs 100 crore...,” he said.
It has been working to complete some of the long-drawn projects in the segment and can bid for fresh projects of state-run Power Grid Corp now.
Project contracting in the power transmission business is expected to pick up in India during rest of the FY12, as the largest transmission utility Power Grid is expected to heighten its contract awarding activity ahead.
“So, on the whole, I see margin improvement happening because of newer projects, new contracts. May not be the third quarter, but fourth quarter...will be a good quarter (for the E&P segment).”
Shares in the firm, now valued by the market at $398.8 million, has lost 19% so far in 2011, more than the benchmark index’s 15% fall during the same period.
On Tuesday, the stock rose as much as 2.12% during the day, but later pared gains and ended 0.31% higher at Rs 195.45, bucking the weak trend in the Mumbai market.