Corporate Presentation - Bajaj Electricals

Strictly Private and Confidential
Bajaj Electricals Limited
Corporate Presentation
November 2009

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Table of Contents
Bajaj Electricals – An Overview
Financials
Strategic Business Units
Key Highlights
g
3

Legacy of the “Bajaj” Group
Shri. Jamanalal Bajaj
• One of the oldest business conglomerates in India
• A group comprising of 25 companies
• Turnover over INR 280 Billion (~USD 6 Billion, at INR 46 per USD)
• Around 36,000 Employees
• Headed by Mr. Rahul Bajaj, currently Member of Parliament and active leader in CII, WEF etc.
Brief on select Bajaj group companies
• Bajaj Auto… Group's flagship company is one of the world's leading 2 & 3 wheeler manufacturer
• A brand well-known across Latin America, Africa, Middle East, South and South East Asia
• The company is currently engaged in life insurance; general insurance and consumer finance businesses
• It has plans to expand its business by offering a wide array of financial products and services in India
• Deals in the financing of consumer durables, personal and small business loans, loan against property/shares
• Achieved a disbursal of INR 24 bn (~USD 0.52 bn) in FY09 under its various financing schemes
• General and Life Insurance Joint venture between Bajaj Finserv and Allianz SE (74:26 holding)
• Assets under management of INR 22 bn (~USD 0.47 bn) as on 2008-09
• Received the “Business Leader in General Insurance” award by NDTV Profit Business leadership in 2008
• Mukand Ltd. is one of the leading manufacturers of alloy and stainless steel long products in India
• The company also builds machines and plays an active role in turnkey projects and highway construction
4

Bajaj Electricals Ltd.… leader in the space with 7 decades of history
Business Overview
Headed by Shekhar Bajaj, Chairman and MD
Evolution
Manufactures & Markets Appliances, Fans, Lighting and
Luminaires
Also has interests in Engineering & Projects, High Masts,
Turnkey Lighting Projects, Transmission Line Towers,
Rural Electrification and Wind Energy
Extensive manufacturing facilities all over India
Strengths in Logistics, Supply Chain, Distribution,
Sourcing Arrangement, Project execution, R&D and
Marketing
Shareholding Pattern as on Sept 09
11%
16%
Promoter and
Promoter Group
Public Institutions
73% Public Non-
Institutions
Project Smile – Implementation of ERP from Oracle
Crossed INR 18 billion turnover mark in 2008-0909
2007-09
Acquired 32% share holding in Starlite Lighting
Limited a CFL manufacturing unit
Mission Excell – Change Management initiative
2003-0606
undertaken.
Successful Financial turnaround of the company
Rights Issue of Rs 108 mn in October 2003
Shifted vendor base to Himachal & Uttaranchal
2000-02 Set up High Mast and TLT manufacturing unit at
Ranjangoan near Pune
Tied up with Morphy Richards
Amalgamated Matchwel Electrical Ltd which
manufactured fans, die-casting components and
1971-99 magneto assembly
Company set up fan manufacturing unit at Chakan
Set up wind farm near Vankusewade near Satara
Commenced operations in Lahore
1940-70 Company started marketing small appliances &
lighting products reserved for manufacturing by the
Small Scale Sector
5

Organization structure
Mr. Shekhar Bajaj
Chairman & Managing Director
Mr. R. Ramakrishnan
Executive Director
Mr. Anant Bajaj
Executive Director
Appliances
SBU
Lighting
SBU
Fans
SBU
Luminaires
SBU
E & P
SBU
Corporate
Finance
HR &
Admin
Morphy
Richards
Advtg. & Brand
Development
Internal
Audit
Secretarial &
Legal
Branch Sales
Support
Customer
Care
IT
6

Table of Contents
Bajaj Electricals – An Overview
Financials
Strategic Business Units
Key Highlights
7

Strategic business units
Bajaj Appliances
FY09 Sales: INR 4,640 mn
As a % of total sales: 26%
Bajaj Engg & Projects
Bajaj Fans
FY09 Sales: INR 5,230 mn
As a % of total sales: 30%
FY09 Sales: INR 2,950 mn
As a % of total sales: 16%
Bajaj Luminaires
Bajaj Lightng
FY09 Sales: INR 2,820 mn
As a % of total sales: 16%
FY09 Sales: INR 2,090 mn
As a % of total sales: 12%
8

SBU wise sales growth
Sales (INR mn)
17,700
6,490
8,440
10,770
13,730
FY05 FY06 FY07 FY08 FY09
(INR mn) FY05 FY06 FY07 FY08 FY09 GOLY CAGR
Total 6,490 8,440 10,770 13,730 17,700 29% 29%
Lighting 1,000 1,090 1,340 1,760 2,090 19% 20%
Luminaires 1,210 1,550 1,930 2,300 2,820 23% 24%
Appliances 1,410 1,940 2,600 3,630 4,640 28% 35%
Fans 1,090 1,410 1,850 2,410 2,950 21% 28%
Engg. & Proj. 1,780 2,450 3,050 3,630 5,230 44% 31%
9

Key Profit & Loss metrics
Gross Sales/Income from Operations (INR mn)
Diversified revenue mix across high growth verticals
CAGR (FY05-09): 28%
18,007
14,046
6,763
8,801
11,146
FY05 FY06 FY07 FY08 FY09
EBITDA (INR mn)
PAT (INR mn)
1,432
1,798
CAGR (FY05-09): 48% CAGR (FY05-09): 60%
429
692
869
FY05 FY06 FY07 FY08 FY09
10

Key Balance sheet metrics
Networth (INR mn)
2,450
CAGR (FY05-09): 27%
1,748
807
901
1,168
FY05 FY06 FY07 FY08 FY09
Reducing debt-equity ratio
Return on Capital Employed
2.1 2.1
2.0
1.4
16%
17%
24%
26%
0.9 9%
FY05 FY06 FY07 FY08 FY09 FY05 FY06 FY07 FY08 FY09
11

Other important metrics
Market Capitalization (INR mn) and Share Price (INR) as on March, 31 st
16,000
900
14,000
12,000
13,800 791 800
700
600
1:1 Bonus during FY 08
10,000000
8,000
6,000
4,000
2,000
7,492
434
4,333
250 3,364
2,593 194
2,532
150
146
500
400
300
200
100
Market Cap
Stock Price
Earning Per Share (INR)
0
FY05 FY06 FY07 FY08 FY09 16-Nov-09
Return on Equity
0
50%
51.69
36%
38%
43%
42.31
18%
15.80
32.63
44.58 42.31
51.69
FY05 FY06 FY07 FY08 FY09 FY05 FY06 FY07 FY08 FY09
12

5 year financial summary (INR mn)
Particulars FY 05 FY 06 FY 07 FY 08 FY 09
Gross Sales & Income from
operations
6,763 8,801 11,146 14,046 18,007
Net Sales 6,496 8,459 10,789 13,745 17,705
PBIDT 429 692 869 1432 1798
% Sales 660% 6.60% 8.17% 806% 8.06% 10.42% 10.16% 16%
Interest 164 180 231 293 370
Depreciation 60 64 73 75 86
Operating profit 205 448 566 1064 1343
Other Income (Net) 13 22 43 50 57
PBT 218 470 609 1114 1400
% Sales 3.35% 5.55% 5.64% 8.11% 7.91%
PAT 138 298 390 731 894
% Sales 2.13% 3.53% 3.61% 5.32% 5.05%
13

Half-Yearly performance (INR mn)
Particulars
Financial Year
ended Mar 09
Half Year
ended Sept 08
Half Year
ended Sept 09
Growth over
Previous period
Net sales 17,705 6,969 8,775 25.92%
PBIDT 1,798 565 912 61.36%
% to sales 10.16% 8.11% 10.39%
Interest 370 178 171
Depreciation 86 39 46
Profit before tax 1,400 348 696 99.83%
% to sales 7.91% 5.00% 7.93%
Profit after tax 894 224 456 103.53%
% to sales 5.05% 3.21% 5.20%
14

Table of Contents
Bajaj Electricals – An Overview
Financials
Strategic Business Units
Key Highlights
15

Overview
Products
Products:
Mixers Grinders, Juicers, Food Processors, Water Heaters,
Air Coolers, Iron, Ovens Toasters Grillers (OTG), Room
Heaters , Toasters & S/W makers, Hand Blenders, Water
Purifiers & Filters, Microwave Ovens, Gas stoves, Electric
Kettles, Coffee / Tea Makers
Competitors: Philips, Kenstar, Usha, Maharaja, Merloni,
Spherehot, Sumeet, CG, National, Black & Decker, Tefal,
Braun
Tie-ups:
17

Sales Performance (INR mn)
APPLIANCES Total W. Heaters Mixers R. Coolers Irons Others
GOLY
CAGR (over 4 yrs.)
28% 17% 35% 18% 37% 28%
35% 30% 45% 24% 31% 37%
18

Key highlights
Water
Wide
Strong
One of the leading players in small appliances market, especially in Mixers, Irons, OTG,
Heaters and Room Cooler
Product Portfolio and highly trusted brand in the small appliances market
distribution network with more than 25,000 retail outlets
Business strategy
• Introduction of new models in Mixers, Water Heaters, Iron & Coolers
• Continue Network expansion and rural penetration
• Improve presence in organized retail
• Ensure success of PLATINI, Gas Appliances and New products such as Home Inverters, DVD players
Key industry growth drivers
• Increase in purchasing power of Indian middle class and rapid urbanization
• Sales in unorganized segment will shift to organized segment as prices reduce
• Organised retail will improve shopping experience and brand presence
19

Bajaj Platini Product Range
20

Morphy Richards Product Range
21

Overview
Products
• Domestic-use: Ceiling, Table, Pedestal & Wall mounted
Fans, Personal Fans, Bajaj-Disney Children’s Fans
• Industrial-use: use: Industrial Exhaust fans, Commercial Air
Circulators, Cooler kits and Pumps
Tie-ups
Products
23

Sales Performance (INR mn)
29%
31%
30%
10%
1,090
1,410
1,850
2,410
22%
2,950
FY05 FY06 FY07 FY08 FY09
Total revenue
% Growth
FANS Total Ceiling TPW
GOLY 22% 25% 9%
CAGR (over 4 yrs.) 28% 29% 23%
24

Key highlights
One
Tie
of the leading players in fan industry with over 15% market share (source: IFMA)
One of the leading players in Premium segment
Tie up with Midea – One of the leading fan manufacturing companies in the world
Business strategy
• Introduction of new models in Premium/ Decorative and Under-Light fans, Fans decorated with more Disney
Characters, Remote controlled Fans
• Focus on Pumps, Motors and Industrial fans
• Expand dealer network, rural penetration and presence in institutional segment
Key industry growth drivers
• Construction and housing industry revival
• Replacement market will improve due to Consumer boom
• With tax reforms, sales from unorganized segment will shift to organized segment as prices will be lower
25

Overview
Products
• Lamps: GLS Lamps, Fluorescent tube lights,
Compact Fluorescent Lamps
• Others: Domestic Luminaires, Ballasts & Starters,
LED Torches
Manufacturing facility:
Hind Lamps, Shikohabad and Starlite Lighting, Nashik
Products
27

Sales Performance (INR mn)
1,000 1,090
9%
23%
1,340
31%
1,760
2,090
19%
4%
FY05 FY06 FY07 FY08 FY09
Total revenue
% Growth
LIGHTING Total CFL GLS&FTL Fittings
GOLY 19% 23% 10% 28%
CAGR (over 4 yrs.) 20% 61% 2% 21%
28

Key highlights
One
Good
Acquired
of India’s oldest lighting company with respected brand image
progress in CFL market
significant stake in Starlite Lighting - a strategic move
Business strategy
• Network expansion and consolidation in Kirana segment, Modern Retail formats. Already covering more than
300,000 outlets
• Focus on CFL since demand for GLS and FTL is not growing g fast. Significant capacity expansion in Starlite Lighting
g
• Motivate consumers to shift to energy saving lamps
Key industry growth drivers
• High growth in CFL due to reduced prices and energy conservation drive at residential, commercial and
government level
• Greater focus on Environment and Climate change amongst Consumers
• Rural electrification and higher Power availability will spur future demand
29

Overview
Products:
• Luminaires: Industrial, Commercial, Decorative, Street
light, Flood light, LED, Lighting Electronic, Lighting Control
• HID lamps: Mercury & Sodium vapor lamps, Halogen
lamps, Metal halide and Fluorescent Lamps
Tie-ups
Products
Technical lighting
IBMS & HVAC
Fire Alarms & Security systems
31

Sales Performance (INR mn)
28%
25% 25%
1,930
1,550
1,210
2,300
19%
2,820
23%
FY05 FY06 FY07 FY08 FY09
Total revenue
% Growth
LUMINAIRE Total Fittings HID
GOLY 23% 24% 15%
CAGR (over 4 yrs.) 24% 25% 17%
32

Key highlights
Offers
One of the leading players in street Lights, flood Lights and industrial applications
the latest and cutting edge Security and BMS (Building Management Systems) to
its institutional customers in partnership with Delta Controls of Canada
Business strategy
• Focus on new segments IT/BPO/Retail/Healthcare/Pharma
• Promote products to builders / Electrical Consultants / Architect segment
• Introduction of new products with LED light source
• Focus on energy efficiency products and Green Building applications
Key industry growth drivers
• Rapid urbanization, emerging segments like retail formats, malls, showrooms, IT parks, Tourism, Services
• Govt. and Private sector spending on infrastructure
Major Customers
• Industrial: TATA Group, Reliance Group, Reliance ADAG, L&T, Aditya Birla Group, Siemens, ABB
• Government Clients: Airport Authority of India, Container Corporation of India, State Electricity Boards, NTPC,
Municipal Corporations & Councils, MSRDC, BEST, DAE
33

Overview
Fields of operation:
• Special Projects: Turnkey Lighting Projects, Factory
lighting, Air-port Lighting, Sports Lighting, Rural
Electrification etc.
• High Mast & Poles: High Mast Lighting, Signage,
Transmission Lines, Energy-efficient Illumination
• Towers: Design, Supply, Erection and commissioning of
Transmission lines and Telecommunication Towers,
Monopoles etc.
Products
Telecom Towers Power Distribution Illumination Projects
Tie-up:
Sports Lighting
Street Furniture
Signages
Power Transmission
High Mast
35

CNC Profile Cutting Machine CNC Press Brake from LVD GODREJ Make Shearing Machine
Ranjangaon factory
Pole Welding Machine Welding of High Mast Section 30,000 TPA Tunnel Enclosed Bath

Sales Performance (INR mn)
87%
5,230
1,780
38%
2,450
3,050
24%
3,630
19%
44%
FY05 FY06 FY07 FY08 FY09
Total revenue
% Growth
E&P
Total
Special
Projects High Mast Towers
GOLY 44% 57% 39% 39%
CAGR (over 4 yrs.) 31% 56% 36% 15%
37

Division wise Sales Performance
53% 58%
49%
32% 29%
35%
15% 13% 16%
33% 32%
39% 38%
28% 30%
Orders In Hand – As on Oct 2009
(INR mn)
Segment
Order Book
Towers 3,974
High Mast & Pole 1,046
Special Projects 3,480
Total 8,500
FY05 FY06 FY07 FY08 FY09
Special Projects High Mast Towers
Particulars
Total
Special
Projects H. Mast Towers
Sales FY09 (INR mn) 5,230 1,600 1,980 1,650
GOLY 44% 57% 39% 39%
CAGR (over 4 yrs.) 31% 56% 36% 15%
38

Key highlights
One of the leading player in sports lighting, power plant lighting and High Masts space
Diversification into related businesses such as Rural Electrification etc
Industry growth drivers
Special Projects
• Huge Investments expected in Power and Infrastructure sector
• Electricity connections to 800 mn households in 125,000 villages will be given in 5 yrs under RGGVY - investment
of INR 1,200 bn
• Major opportunities in Rural electrification and Transmission Line Towers
• Airport Authority of India to develop 25 non metro Airports
• Construction of IT parks / BPO / Shopping Mall / Special Economic Zones
High Mast & Poles
• Jawaharlal Nehru National Urban Renewal Mission within 7 yrs… 23 cities to be transformed involving an
investment of INR 400 bn
Towers
• 60000 CKM transmission network to be added by 2012
• Present capacity of power transfer to be increased from 9000 MW to 30000 MW – Investment of INR 2,000 bn
• 350,000 TCT by 2010 –investment of INR 1,050 bn
39

GMC Balayogi Football cum Athletic Stadium
Hyderabad
BAJAJ Engineering & Projects BU

Sawai Mansingh Cricket Stadium, Jaipur
BAJAJ Engineering & Projects BU

Main Tennis Stadium At Fateh Maidan
Hyderabad

Kothagudam – APSEB - 2 x 210 MWTPP

Queen’s Necklace At Marine Drive - Mumbai

Highmast for Telecommunication &
Antenna Mast
Telecommunication
Application
Antenna Mast for Reliance
Infocom-VPT Project

Signages & Gantry

Flag Mast
Installed at Kaithal & Ladwa, a Haryana
ana
Largest National Flag (22 x
14 mtrs) installed at Kaithal
& Ladwa in Haryana
The India’s tallest mast 63
mtrs (48x72ft)
Hoisted & lowered through
high speed
motorised winching
arrangement. This
Mast is manufactured at
Ranjangaon and
Erected by Bajaj E&P BU
team

Transmission i Line Towers
•

Monopole Tower Manufactured At Ranjangaon Plant

Monopoles For Power Transmission- PGCIL’s Dadri Ballabhgarh 400
KV D/C Monopole

132 kv d/c Transmission Line at Pachpatta, Nasik - for ABB /
Enercon / MSETCL

Table of Contents
Bajaj Electricals – An Overview
Financials
Strategic Business Units
Key Highlights
53

Key Highlights
Nationwide distribution network with wide urban and retail penetration
Strong brand positioning to drive growth
Experienced management team backed by distinguished board
Robust, sustainable business strategy
Strong financial track record
Diversified Product & Business portfolio – Both Consumer facing and Industry /
Infrastructure facing
54

Nationwide distribution network
Distribution ib ti network
• 19 branches
• 600 distributors
• 5,000 dealers
• 240 service centers
• 300,000+ retail outlets
Parwanoo
Chandigarh
Zirakpur
Dehradun
Noida
Delhi
Faridabad
Jaipur
Lucknow
Patna
Guwahati
Ahmedabad
Indore
Raipur
Ranchi
Calcutta
Daman
Nagpur
Bhubaneshwar
Mumbai
Has a strong pan India footprint and has displayed great
strengths in distribution, logistics & project execution…
plans to further amplify its retail network
Pune
Goa
Hyderabad
Bangalore
Cochin
Chennai
Branch
Depot
55

Strong brand positioning to drive growth
Bajaj Appliances
• Tie up with Morphy Richards (UK) for
manufacturing & marketing premium products in
India
• Bajaj Platini introduced at the Premium end
• New Ad-campaign on “Rock star mommy”
launched
Bajaj Fans
• Tie up with one of the world’s
leading fan manufacturers - Bajaj
Midea
• Targeting kids segment by
supplying specially designed fans
through a tie up with Disney
Bajaj Luminaires
• Tie up with Trilux Lenze
Bajaj j Lighting
g
(Germany) for premium technical
lighting and RUUD Lighting (US)
• Significant network expansion
undertaken
for LED
• Significant capacity expansion in
• New Foray into IBMS , HVAC ,
Starlite Lighting for CFLs
Fire Alarms and Security systems
• Focus on Rural markets
Strong brand name created in consumer durables & lighting businesses over the last seven decades
56

Experienced management team backed by eminent board
Top Management
Shekhar Bajaj, Chairman & MD - Bajaj Electricals Ltd.
Shekhar Bajaj
Chairman & Managing Director
— Worked previously at Bajaj Sevashram and Bajaj
International
— Present on Board of Directors for Bajaj Auto
— Former President of ASSOCHAM, IMC, Elcoma, IFMA etc.
Anant Bajaj R. Ramakrishnan P. P. Jathar
Executive Director
Executive Director
Executive VP & CFO
— 11 years of experience in the industry
— Holds a BCom and PGDFMB
— Director on Board of Bajaj
International
— B.Sc. (Hons.) and PGDBM from XLRI Jamshedpur
— Associated with the Company since last 10 years
after 17 yrs in Asian Paints
— Earlier President & COO of Company
— Actively associated with ISA, ASCI – CCC, BMA,
CII and IMC
Eminent Board
— 26+ years of experience in the industry
— Holds a bachelors degree in commerce and
a qualified chartered accountant
— Responsible for all financial and accounting
matters
H. V. Goenka
A.K.Jalan
Ajit Gulabchand
Dr.(Mrs) Shahani
Director
Director
Director
Director
V.B.Haribhakti
Director
Madhur Bajaj
Director
Dr. R P Singh
Director
57

Robust business strategy
Focusing on high
growth businesses
• Engineering & Projects revenue has expanded more than 5 fold from INR 950 mn
(FY04) to INR 5,230 mn (FY09). TLT, Rural Electrification have large growth potential
• Focusing on premium brands like Morphy Richards and Trilux and making them
successful
Leveraging strong
brand equity
• Created a strong brand name in consumer durables and lighting businesses over the
last seven decades
• Continuously focusing on brand building and expanding retail network
Substantial
market share
• One of India’s leading players in the small appliances , fans and Lighting markets
• One of the market leaders in mixers, irons OTGs & water heaters
• Strong Distribution and presence in urban and rural markets
Diversified player
• Diversified player with good presence in:
• Consumer facing business (Appliances, Fans and Lighting)
• Industry facing business (Luminaires)
• Infrastructure facing business (Engineering & projects- High mast, turnkey
lighting project, Transmission Line tower and Rural Electrification)
58

BAJAJ ELECTRICALS LTD.
Thank you!
59