Bajaj Electricals To Increase Premium Range To Target Urban Upscale Consumers

Bajaj Electricals is increasing its play in the premium range in appliances and other segments. The company expects the revenue contribution from upscale products to rise as it has lined up several new launches, MD & CEO Anuj Poddar said.

The company has recently launched a new brand 'Nex', which will target upscale urban consumers with its premium range of appliances. Despite a slowdown in some segments, Bajaj Electricals will have new product launches in the premium space and in Morphy Richards in the latter half of this year.

Overall, as a company, it expects a lot more contribution coming from the premium segment, he said. "We are focusing on two things -- brand upliftment and product premiumisation -- by launching new products," Poddar told PTI.

Both of these are helping the company grow market share and the Bajaj group firm will continue to focus on this strategy, he added. Over the current market scenario, Poddar further said there is a "demand slowdown" in the market for categories like fans where star rating has been implemented.

"There is a cost side increase, to comply with that and we were not able to pass fully. Similarly in other categories, the demand is soft. There is certain discounting etc. we all are resorting to and that is impacting margins," he added.

The company expects new product launches and premiumisation will help it retain its revenue growth. "It may or may not be volume growth, but as we launch more products at least from ASP (Average Selling Price) and portfolio mix, where we are seeing the change," he said.

In Q4, overall revenue from the fan segment was flat and there was degrowth in the sub-economy category but Bajaj Electricals had a growth in the premium category. "Similarly in the consumer lighting, we have seen a degrowth because of demand being weak but we made up for that in the professional lighting," Poddar said, adding, "It's more about us balancing our portfolio and doing the right things in a situation when actual demand is weak."

According to him, in FY22 sub-economy fans contributed 74% of sales in the category, which is now down to 67% as the contribution from the premium segment is picking up. "This is showing a positive change in the portfolio mix," he said.

Similarly, in other segments such as mixer grinders, sales of high-value products have increased. Bajaj Electricals' revenue from consumer products, which includes appliances, fans, and sales from Morphy Richards, was at Rs 3,764.24 crore.

While its lighting solutions business had contributed Rs 1,125 crore. When asked whether Bajaj Electricals has any plans to enter into compressor-based cooling product segments such as airconditioner or refrigerators, Poddar said: "We have no intent to go into that."

Over the expansion of distribution, the company's focus is to grow sales through distribution. The company is also witnessing good growth coming from modern trade channels helped by its premium portfolio.

"On online also we are doing fairly well," he said, adding it contributes 12% to sales of its consumer products. Besides consumer Products and Lighting Solutions, Bajaj Electricals is also present in the EPC segment (Engineering Procurement & Construction) in which the company executes projects related to power transmission, distribution, and illumination.

Earlier this month Bajaj Electricals reported around 13% growth in its consolidated revenue from operations to Rs 5,339.69 crore for the financial year ended on March 31, 2023.

The latest closing price of this Bajaj Electrical stock is Rs 1,158.10, it was down 1.23% over the previous day's closing price. In the last one year the share price has rallied by 17.59% and surged by 218.42% respectively.