Bajaj Electricals Q2 net up 8% on one-time gain, lower tax

Bajaj Electricals  ' second quarter net profit rose 8% year-on-year to Rs 27 crore as losses in the engineering and projects business were offset by one-time profit from sale of investment and lower tax expenses.

Profit before other income, finance costs, taxes and exceptional items slumped 59% to Rs 21 crore, sending its shares down over 4% in afternoon trade.

The consumer durables maker's net sales for the July-September quarter were up 5% from a year ago to Rs 733 crore.

Bajaj Electricals had an exceptional profit of Rs 25 crore on sale of its entire shareholding in Bajaj Ventures in Q2.

Its tax expenses were also lower at Rs 5 crore, compared with Rs 12 crore a year ago.

The company's sales from consumer durables rose 17% to Rs 399 crore while profit rose 12% to Rs 37 crore. Its sales in lighting business rose 7% to Rs 202 crore, while profit was flat at Rs 13 crore.

However, EBIT margin in consumer durables declined to 9.3% from 9.5% and in lightings it was down to 6.5% from 6.9%, last quarter, due to commodity price volatility and exchange rate fluctuations.

It is expecting consumer durables as well as lighting to clock good growth in the second half of this year, helped by the festive season.

But more importantly, It’s the engineering and projects business that continues to hurt the company.

"On the engineering and projects side the infrastructure industry has been going through a tough phase. This coupled with time and cost overrun in certain projects has compounded the problems of the segment, resulting in losses," Shekhar Bajaj, chairman and MD, said on Thursday.

Bajaj Electricals' sales from E&P business declined 22% to Rs 133 crore, while it reported a loss of Rs 27 crore, compared with a profit of Rs 7 crore in the year ago quarter.

At 13:50 hrs, Bajaj Electricals shares were down 4.5% at Rs 214.65 on NSE.

Source: www.moneycontrol.com

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Gaurav Agarwal 

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DENIP Consultants Pvt Ltd