Incorporated in July 1938, it commenced operations as Radio Lamp Works and changed its name to the present one in 1960. The company is part of the US $ 3 billion Bajaj group who are in the business of steel, sugar, two and three wheelers besides an impressive range of consumer electrical products. Bajaj Electricals Limited (BEL) is a part of the Rs. 20000 crore "Bajaj Group" who are in the business of steel, sugar, two wheelers & three wheelers besides an impressive range of consumer electrical products. It's a 70 year old company with a turnover of over Rs. 1404 crores aiming to be a Rs. 2001 crore company in the next couple of years.

Bajaj Electricals has 19 branch offices, a chain of 600 distributors, 3000 authorised dealers, over 2,50,000 retail outlets and over 230 service franchises spread across the country. BEL today has five major strategic business units comprising of home appliances, fans, lighting, luminaires and engineering & projects. We are also in the business of manufacturing, erection and commissioning of Transmission Line Towers, Telecom Towers, Mobile Telecom Towers and Wind Energy Towers. Export of all BEL's products except of its engineering and projects business unit is taken care of by group company Bajaj International Pvt. Ltd.

Products & Services:

Bajaj Electricals (BAJAJELE) is a diversified company with five major strategic business units comprising of home appliances, fans, lighting, luminaires and engineering and projects. The company is also in the business of manufacturing, erection and commissioning transmission line towers, telecom towers, mobile telecom towers and wind energy towers. Some appliances are marketed under the Morphy Richards brand name. Most of the lamps are manufactured by their group company, Hind Lamps, in technical collaboration with Philips N. V. of Holland.

Manufacturing units in the Pune and Satara districts of Maharashtra have installed capacities of 1 million fans, 25,000 accessories, 19,700 swaged and octagonal poles, 300,000 magneto assemblies, 2,275 highmast shafts and 24,000 transmission line towers. The Ranjangaon unit is India's leading manufacturer and galvanizer of structural steel elements, rebars, sections, pipes and tubes. A 2.8 MW wind farm has been set up in Maharashtra. The luminaire division has in FY07 successfully launched the Trilux products in India through a distribution arrangement with Trilux Lenze of Germany. The company acquired 32% stake in Starlite Lighting, a leading compact fluorescent lamp manufacturer and ventured into building management systems partnering Securiton of Switzerland for fire alarm systems, security and access control systems.

Recent Developments:

Bajaj Electricals (BEL) entered into a strategic alliance with Italy's household appliances maker Nardi Elettrodomestici. Nardi Elettrodomestici will manufacture products under the brand name of "Bajaj Nardi", which will then be marketed and distributed through BEL's network in India and the SAARC region. Through this exclusive tie up BEL will enter the segment of household appliances aimed at targeting the premium segment.

The companies will initially kickstart with the launch of hobs & chimneys which will be expanded to other products like OTGs, designer microwaves, free standing and built-in ovens, dishwashers and other appliances which are considered as integral household appliances for the changing needs of Indian kitchen. In a move to offer a wider portfolio to its customers Bajaj Electricals is venturing into the BMS Industry (Building Management Systems). Bajaj Electricals is partnering with Securiton of Switzerland for fire alarm systems and subsequently for security and access control systems.

Valuation:

At current market price, stock is trading at 10.67 P/E multiple of its FY2010 estimated earnings. We recommend investors to buy "Bajaj Electricals Limited" at every dip with medium to long term investment horizon.