He said in the past six months, the company has repositioned and relaunched its two largest brands – Bajaj and Morphy Richards – and has just launched a new premium and aspirational brand Nex.
Next, the company will reposition its cookware brand Nirlep.
As of 2021-22, the margin of the consumer business was 6.8%. The company is yet to announce its 2022-23 financials.
“The average selling price (ASP) in the last one year is up by 15% due to both inflation and premiumisation. Even without inflation, the ASP will be up by 10% and that’s a strategy we will pursue,” said Poddar. “Margins will expand by one percentage point every year. It might improve more this year with inflation coming down, but we are currently in an investment mode to grow the business.”
With the demerger of the power distribution and transmission business, Bajaj Electricals will become a consumer focused company in the household appliance segment and lighting. The power business used to contribute 10-15% to its revenue.
The company will also take board approval later this month for raising of funds by way of issuance of securities on a private placement basis. Poddar said this is an enabling provision to ensure Bajaj Electricals can quickly raise any funds, if required during the financial year. “We did it last year when we took approval for ₹300 crore but ultimately did not raise any. The limit for this year will be decided in the board meeting,” he said.
Bajaj Electricals intends to launch 150-200 stock keeping units every year with focus on premiumising the portfolio. The newly-launched Nex brand is operating only in fans as of now, selling products at a price up to ₹12,000 compared with ₹2,500 for products sold under the Bajaj brand. Nex is currently sold only online.
Poddar said Bajaj Electricals will invest ₹100-150 crore annually to expand capacities, new product development and marketing, and will review in 2025 whether it needs to increase the investment corpus. “Last three years, we have grown sales by 10% CAGR (compound annual growth rate) despite Covid. We intend to go beyond that in the next three years,” he said.
