Bajaj Electricals Ltd shares continued their downward trend, falling over 4% on Thursday, after the electrical goods maker reported a consolidated net loss of Rs 32.54 crore for the second quarter ended September (Q2) compared with a net profit of Rs 29.83 crore in the year-ago quarter.
At 10:53 am, shares of Bajaj Electricals were trading at Rs 338.35, down 4.2%, after losing 8.6% in the previous session. The stock has fallen nearly 33% in the past one year compared with a 13% rise in the benchmark Nifty 50 index.
On Wednesday, Bajaj Electricals reported 32% year-on-year decline in consolidated gross sales to Rs 1,074.64 crore in the September quarter. The consumer products segment revenue grew 9% to Rs 701.52 crore during the quarter, but the EPC (engineering, procurement and construction) segment revenue declined by a huge 58.8% to Rs 393.81 crore.
Shekhar Bajaj, chairman and managing director of Bajaj Electricals, said that the consumer products segment registered a moderate growth on account of overall slowdown in the economy, while the EPC segment registered a planned de-growth due to reduction in fresh bidding. He added that this will continue to impact the company’s profitability in the near future, but the company is “confident about a healthy bounce back as the strategic shift plays out”.
To recall, ICRA had downgraded the credit ratings of a few debt instruments of Bajaj Electricals due to the increasing leveraging level and the subsequent weakening of debt coverage metrics. Similarly, in August 2019, CARE Ratings downgraded the credit rating of the company’s commercial paper due to the moderation in liquidity profile marked by large accumulation of receivables under engineering procurement commissioning (EPC) division. This accumulation had affected the cash generated from operations for financial year 2019.
Bajaj Electricals has now said that it has repaid loans worth Rs 127.11 crore on a net basis in the first half of the current fiscal year after the company managed to generate positive cashflow from operations of Rs 294.17 crore during the period compared to negative cash outflow Rs 471.35 crore in the same period a year ago.
Shekhar Bajaj said: “We have been pursuing our stated path of a strong focus on positive cashflow from operations, reducing our debt and strengthening our balance sheet and we have done well on all of these parameters.”