Updated February 5th, 2024 at 15:23 IST
Bajaj Electricals profit declines for third quarter in a row
Analysts attribute the subdued demand to elevated inflation levels, impacting the splurging tradition on non-discretionary products during festivals.
Bajaj Electricals has reported a third consecutive quarterly profit drop. The consolidated net profit for the quarter ending December 31 plummeted nearly 40 per cent to Rs 37.36 crore. The downturn follows declines of 56 per cent and 14 per cent in the two preceding quarters. The typically robust festival season during October-December, known for increased consumer spending, was hampered by high inflation, restraining expenditure on non-essential items in both rural and urban areas.
Analysts attribute the subdued demand to elevated inflation levels, impacting the splurging tradition on non-discretionary products during festivals. While companies like Voltas and Blue Star thrived due to heightened demand for air coolers and fans driven by warmer-than-usual temperatures, others like Havells faced a setback with slowing sales of various home appliances.
Bajaj Electricals acknowledged the challenges, stating, "Consumer products continue to show signs of rural stress and weak consumer demand."
The company's total revenue declined 6.2 per cent to Rs 1,228 crore, marking the third consecutive quarter of decline. Sales of consumer products, constituting nearly 80 per cent of revenue, witnessed 8 per cent drop, while sales of lighting products marginally increased by about 1 per cent.
Bajaj Electricals faced a 4.8 per cent increase in input costs, amounting to Rs 124 crore. The company's performance underscores the broader economic impact of inflation and consumer sentiment on the electrical goods sector during a crucial festive period.
Bajaj Electricals shares rose 1 per cent to Rs 1,062.50 after earnings announcement.
Published February 5th, 2024 at 15:23 IST