Bajaj Electricals Ltd. — Investor Presentation 2021

Nov 12, 2021

November 12, 2021

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To, BSE Limited

: Code No. 500031

Department of Corporate Services Phiroze Jeejeebhoy Towers Dalal Street Mumbai 400 001

National Stock Exchange of India Limited

Listing Department Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai 400 051

: BAJELEC - Series: EQ BAJ22 -Series C NCDs INE193E08012

Dear Sir/Madam,

Sub.: Presentation on the Financial Results of Bajaj Electricals Limited (“the Company”) for the half year ended September 30, 2021

The presentation on the Financial Results of the Company for the half year ended September 30, 2021, is enclosed.

We request you to take it on records.

Thanking you,

Yours Faithfully, For Bajaj Electricals Limited

Digitally signed by AJAY SURESH AJAY SURESH NAGLE NAGLE Date: 2021.11.12 14:43:58 +05'30' Ajay Nagle EVP and Head – Legal & Company Secretary

Encl. as above

Regd. Office: 45/47, Veer Nariman Road, Mumbai 400 001. Tel.: 022-61497000 Email ID: legal@bajajelectricals.com Website: www.bajajelectricals.com Corporate Identity Number (CIN): L31500MH1938PLC009887

Investor Presentation : Q2 FY’22

12[th] November, 2021

Disclaimer

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The material that follows is a Presentation of general background information about the activities of Bajaj Electricals Limited ( “Company” ) or its subsidiary or joint venture or associate (together with the Company, the “Group” ) as at the date of the Presentation or as otherwise indicated. It is information given in summary form and does not purport to be complete and it cannot be guaranteed that such information is true and accurate. This Presentation has been prepared by and is the sole responsibility of the Company. By accessing this Presentation, you are agreeing to be bound by the trading restrictions. It is for general information purposes only and should not be considered as a recommendation that any investor should subscribe to or purchase the Company’s equity shares or other securities.

This Presentation includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “anticipates”, “believes”, “estimates”, “expects”, “intends”, “may”, “plans”, “projects”, “seeks”, “should”, “will”, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, aims, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Presentation and include statements regarding the Company’s intentions, beliefs or current expectations concerning, amongst other things, its results or operations, financial condition, liquidity, prospects, growth, strategies and the industry in which the Company operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The factors which may affect the results contemplated by the forward looking statements could include, among others, future changes or developments in (i) the Group’s business, (ii) the Group’s regulatory and competitive environment, and (iii) political, economic, legal and social conditions in India or the jurisdictions in which our Group operates.

Forward-looking statements are not guarantees of future performance including those relating to general business plans and strategy of the Company, its future outlook and growth prospects, and future developments in its businesses and its competitive and regulatory environment. No representation, warranty or undertaking, express or implied, is made or assurance given that such statements, views, projections or forecasts, if any, are correct or that the objectives of the Company will be achieved. There are some important factors that could cause material differences to Company’s actual results. These include (i) our ability to successfully implement our strategy (ii) our growth and expansion plans (iii) changes in regulatory norms applicable to the Company (iv) technological changes (v) investment income (vi) cash flow projections etc. The Company, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. The information contained in this Presentation, unless otherwise specified is only current as of the date of this Presentation. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent development, information or events, or otherwise. Unless otherwise stated in this Presentation, the information contained herein is based on management information and estimates. This document is just a Presentation and is not intended to be and does not constitute a “prospectus” or “offer document” or a “private placement offer letter” or an “offering memorandum” or an “offer” or a solicitation of any offer to purchase or sell any securities.

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Table of Contents

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1. Covid-19 Update

2. Performance Overview

3. Financial Overview

4. Business Highlights

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Covid-19 Update

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1. 85% of on-roll employees are fully vaccinated

2. Currently no active Covid case among employees

3. All offices have resumed & are operational

4. Head office working at c.40%, following Covid protocols

5. Adopting a hybrid model

6. Sales, Operations, Manufacturing and Logistics operations continue to function smoothly

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Performance Overview

CP Performance (31% YoY Growth and 22% 2-Year CAGR)

• Industry leading growth in core Electrical Consumer Durables (ECD) Portfolio

• Synchronised Growth across categories (Appliances – 41% , Fans – 13% , Lighting – 20% & MR – 35%)

• Operating Margin at 10% (vs. 10.7% in Q2 FY21)

Channel Leverage & Market Share (MS) Gains

• Balanced Portfolio b/w Trade and Alternate (64 : 36)*

• Meteoric Growth in Sunrise Channels : E-Com (74%) & MFR (64%) YoY

• MS Gains in all core categories : Fans, Appliances & Lighting

Cash Conversion & Balance Sheet (BS) Strength

• Positive Cash Flow from Operations (CFO) of 476 Crores, making it 10[th] consecutive quarter of positive CFO

• Healthy BS with Net Debt: Equity ratio at 0.15 and Net Debt lowered by 419 crores QoQ

EPC : Calibrated Approach

• Overall revenue de-growth mainly due to focus on project execution and selective new orders in-take

• Consolidation of leadership in Illumination segment (25% YoY growth)

• Carry Forward Order Book of INR 758 Crores (Illumination – 236 , PT - 445 , PD - 77 Crores)

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*Based on Gross sales|| MR – Morphy Richards, MFR – Modern Format Retail, PT – Power Transmission, PD – Power Distribution

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• Profit & Loss Statement • Segment Details • Financial Overview Operational Highlights • Cash Flow Summary • Debt Position

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Profit & Loss (P&L) Statement

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			(All	fig.	in INR Crores)
Particulars Net Sales	Q2 FY’22 1,302	Q2 FY’21 1,218	YoY Gr (%) 6.9%		Q1 FY’22 857	Staff	Cost : Commentary
Less : COGS	918	859	6.8%		568	• One-time impact of INR 3 crores
Gross Margin	384	359	7.1%		288	due to CRS at factory
Staff Cost	104	98	6.9%		106	Other Expenses :
Other Expenses	186	157	18.7%		182	• Incremental publicity		spends of
Less : Dep. & Amortization	17	19	(11.6)%		17	INR 7 crores
Add : Other Income	21	9	135.6%		9	Other Income :
EBIT	99	95	4.2%		(8)	• INR 4 Crores on a/c of sale of
As % of Net Sales	7.6%	7.8%			(1.0)%	P,P&E • INR 3 Crores interest on IT
Less : Finance Cost	19	22	(11.4)%		23	refund
PBT	79	73	8.9%		(31)	Finance Cost :
Less : Taxes	17	20	(15.1)%		(6)
						• INR 3.9 Crores attributable to
PAT	63	53	17.8%		(25)	Starlite (one-time pre-closure of
As % of Net Sales	4.8%	4.4%			(2.9)%	NCDs & lease of machineries)
CRS : Compulsory	Retirement Scheme, P,P&E : Property,		Plant & Equipment, NCD : Non-Convertible			Debentures		7

Segment Details

Segment Revenue	Segment Revenue	Segment Revenue	Segment Revenue	Segment Revenue	Segment Revenue	Segment Revenue	Segment Revenue	Segment Revenue	Segment Revenue	Segment Revenue
Particulars		Q2 FY’22 (in Crores)		Q2 FY’21 (in Crores)			YoY Gr (in %)		Q1 FY’22 (in Crores)
Consumer Products		1,035		792			30.7%		617
EPC		267		425			(37.3)%		240
Total Op. Income 1,302 1,217 6.9% 857
Segment Results
Particulars	Q2 FY’22				Q2 FY’21			Q1 FY’22
	EBIT (Cr)		EBIT(%)		EBIT (Cr)	EBIT(%)		EBIT (Cr)		EBIT(%)
Consumer Products	103		10.0%		85	10.7%		6		1.0%
EPC	(14)		(5.1)%		7	1.5%		(13)		(5.6)%
Total*	99		7.6%		95	7.8%		(8)		(1.0)%

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Commentary

CP Segment :

• 2[nd] highest quarterly sales achieved, surpassed INR 1,000 Crores mark

• Operating margins grew by 22% & restored to double digit despite rise in input costs (and dip in Gross Margins)

• Further momentum in Cost savings via “MULYA” & “SAMRIDDHI” initiatives

• EBIT factors in impact of additional allocation (INR 7 Crores) of Overheads to CP Segment

EPC Segment :

• Illumination BU clocked >INR 150 Crores sales, healthy 25% YoY growth with positive EBIT

8 *includes other unallocable income

Operational Highlights

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Category Growth

Particulars	Q2 FY’22 (in Crs)	Q2 FY’21 (in Crs)	YoY Gr (in %)	Q1 FY’22 (in Crs)
Appliances	603	428	41.0%	290
Fans	220	195	12.5%	229
Lighting	131	109	20.2%	65
Morphy Richards	81	60	35.0%	34

Receivables Movement

Particulars	Sep’21 (in Crs)	Jun’21 (in Crs)	Mar’21 (in %)	Mar’20 (in Crs)
Consumer Products	539	390	492	563
Power Distribution	674	778	972	1,388
Power Transmission	231	249	255	445
Illumination	212	207	198	140
Total 1,657 1,624 1,917 2,537

Commentary

Appliances :

• Highest YoY growth among national players (>40%)

Lighting :

• Growth majorly driven by new launches

Morphy Richards :

• Growth fuelled by distribution expansion & revitalised positioning

Receivables :

• Continued reduction in Power Distribution outstandings

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Cash Flow Summary (All fig. in INR Crores)

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Particulars	Q2 FY’22	Q2 FY’21	H1 FY’22	H1 FY’21		Commentary	Commentary
Profit Before Exceptional Items and Tax	79	101	48	41	WC Release :
Adjustments for :
• Non-Cash items	27	10	92	53	• To	the tune of INR 300	Crores
• Increase / Decrease in WC	380	208	397	378	due to Vendor financing in Q2
• Taxes Paid	(10)	3	(22)	(4)
Net Cash from Operating Activities (A)	476	322	515	467	Repayment of Borrowings:
Investment in Group Entities	(10)	0	(25)	0	• Overall Gross Debt & Net Debt
Capital Expenditure (net of sale proceeds)	(4)	(9)	(13)	(13)	reduced by INR 452 and 419
Miscellaneous Items	9	(24)	3	(47)	Crores respectively during Q2
Net Cash (used in) /from investing activities (B) Proceeds from issues of shares (net of issue expenses)	(5) 5	(33) 2	(35) 9	(60) 3	Investment in Subsidiaries :
Proceeds/ (Repayment) of Borrowings	(452)	(251)	(404)	(431)	• Acquisition of Nirlep 20% stake
Payment of Lease Liabilities	(4)	(7)	(10)	(13)	for INR 10 Crores
Interest Paid	(54)	(23)	(76)	(45)
Net Cash (used in) /from financing activities (C)	(505)	(278)	(482)	(486)	Interest paid :
Net increase / (decrease) in Cash & Bank balances	(34)	10	(2)	(79)	• Includes accrued interest paid
Opening Balance of Cash/Bank Balances	78	12	46	102	for NCD tranche repayment
Closing Balance of Cash/Bank Balances	44	22	44	22
WC : Working Capital, NCD : Non-Convertible	Debentures						10

Debt Position

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Debt Position	Debt Position	Debt Position	Debt Position
(All fig. in INR Crores)
Particulars	As on Sep’21	As on Jun’21	As on Sep’20
Gross Debt	281	733*	559
Less: Cash & Cash Equivalent 44 78 22 Net Debt 237 656 537 Networth 1,606 1,536 1,424
Net Debt / Equity (x) 0.15 0.43 0.38
Interest Coverage (x) 5.1 - 4.3

Note : Interest coverage = EBIT/ Finance Cost

*includes INR 215 Crores of debt taken over on acquisition of Starlite Lighting Limited in Q1 FY’22

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• New Launches (Consumer Products, Illumination) • Brand Campaigns (Consumer Products) • Marquee Project (Illumination) Business Highlights • Project Update (Power Transmission, Distribution) • Awards & Recognitions

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New Product Launches (Consumer Products)

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Compagno Water Heater
Splendora
Titanium Armor & Swirl
Anti Stain Mixer
flow technology
Herculo
Ivora Insect Shield Lamp 53
1000 Watt Mixer with
Spectrum based lighting for
Launches ball bearing Motor
effective shield against
mosquitoes & house flies
Gas Stove Glide
Frameless Glass Top range
High Speed Decorative Fan
67 during half-year 13
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Brand Campaigns (Consumer Products)

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Fans
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Mixer Grinder
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Air Coolers Mixer Grinder
LED
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LED
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New Product Launches (Illumination)

Skylux Surface

Sunsoko

Optimal illumination of Workstation

All-In-One Solar Street Light

94*

Launches

Ameris

Linear Highbay

commercial luminaire (Suspended, Recessed and Surface mounted)

for illuminating large spaces uniformly

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• 158 during half-year

Marquee Project (Architectural Lighting)

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SIDHWAN Canal, Ludhiana Flyover Beautification

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Project Update

Power Transmission

• Around 988 ckms commissioned till Q2 FY’22

• Orders worth INR 123 crores secured in H1 FY’22

Power Distribution

• Operational closure of 4 projects completed

• a) In West Bengal – 2 projects: Bankura & Jalpaiguri

• b) In Bihar – 2 projects: East Champaran & Darbhanga DDUGJY

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220 KV Substation, MPPTCL
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Kaddaperi Monopole Line
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Awards & Recognitions

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Thank You

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Shareholding Information

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Pattern as on 30 [th] September, 2021
13.0%
For IR related queries
11.0%
Write to us at
Rakesh Dash
Rakesh.dash@bajajelectricals.com
12.9%
63.1%
Suketu Shah
Suketu.shah@bajajelectricals.com
Promoter & Promoter Group Foreign Institutional Investors
Domestic Investors Others/ Retail Invetsors
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