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Strictly Private and Confidential
Bajaj Electricals Limited
Corporate Presentation
November 2009
Disclaimer
This presentation has been prepared by Bajaj Electricals Limited (the “Company”) solely for providing information about the Company. This presentation is confidential and may not be copied or disseminated, in whole or part, in any manner. This presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty or undertaking, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness, correctness and reasonableness of the contents of this presentation. This presentation has not been approved and will not be reviewed or approved by any statutory or regulatory authority in India or by any Stock Exchange in India and may not comply with all the disclosure requirements prescribed thereof. This presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this presentation is expressly excluded. No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. Neither the Company nor any of its respective affiliates, advisers or representatives, shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. The information contained in this presentation is only current as of its date. Certain statements made in this presentation may not be based on historical information or facts and may be “forward-looking statements”, including those relating to the Company’s general business plans and strategy, its future financial condition and growth prospects, and future developments in its industry and its competitive and regulatory environment. Actual results may differ from these forward-looking statements due to a number of factors, including future changes or developments in the Company’s business, its competitive environment, information technology and political, economic, legal and social conditions in India and worldwide. The Company undertakes no obligation to update forward looking statements to reflect events or circumstances after the date thereof. This presentation and any information presented herein are not intended to be, offers to sell or solicitation of offers to buy the Company’s equity shares or any of its other securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. The Company’s equity shares have not been and will not be registered under the U.S. Securities Act 1993, as amended (the Securities Act”) or any securities laws in the United States and, as such, may not be offered or sold in the United States or to, or for the benefit of, U.S. persons (as such term is defined in Regulation S under the Securities Act) absent registration or an exemption from the registration requirements of the Securities Act and applicable laws. Any offering of the equity shares made, if any, in the United States (or to U.S. persons) was made by means of a prospectus and private placement memorandum which contained detailed information about the Company and its management, as well as financial statements. The Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person.
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Table of Contents
Strategic Business Units
Financials
Key Highlights
Bajaj Electricals – An Overview
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Legacy of the “Bajaj” Group
Shri. Jamanalal Bajaj
• 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
Brief on select Bajaj group companies
• 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.
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Bajaj Electricals Ltd.… leader in the space with 7 decades of history
Business Overview
Headed by Shekhar Bajaj, Chairman and MD
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
Commenced operations in Lahore
Company started marketing small appliances &
lighting products reserved for manufacturing by the
Small Scale Sector
1940-70
Amalgamated Matchwel Electrical Ltd which
manufactured fans, die-casting components and
magneto assembly
Company set up fan manufacturing unit at Chakan
Set up wind farm near Vankusewade near Satara
1971-99
2000-02 Set up High Mast and TLT manufacturing unit at
Ranjangoan near Pune
Tied up with Morphy Richards
Acquired 32% share holding in Starlite Lighting
Limited a CFL manufacturing unit
Evolution
Shareholding Pattern as on Sept 09
2007-09
Project Smile – Implementation of ERP from Oracle
Crossed INR 18 billion turnover mark in 2008-09
2003-06
Mission Excell – Change Management initiative
undertaken.
Successful Financial turnaround of the company
Rights Issue of Rs 108 mn in October 2003
Shifted vendor base to Himachal & Uttaranchal
73%
11%
16%Promoter andPromoter GroupPublic Institutions
Public Non-Institutions
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Organization structure
Mr. Shekhar BajajChairman & Managing Director
Mr. R. RamakrishnanExecutive Director
Appliances SBU
LightingSBU
LuminairesSBU
Customer Care
Fans SBU
Branch SalesSupport
IT
E & PSBU Corporate
Finance
Secretarial &Legal
InternalAudit
HR &Admin
Mr. Anant BajajExecutive Director
Morphy Richards
Advtg. & Brand Development
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Table of Contents
Strategic Business Units
Annexure: Financials Statements
Key Highlights
Bajaj Electricals – An Overview
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Strategic business units
Bajaj FansBajaj Engg & Projects
Bajaj Lightng
Bajaj Appliances
Bajaj Luminaires
FY09 Sales: INR 2,950 mnAs a % of total sales: 16%
FY09 Sales: INR 5,230 mnAs a % of total sales: 30%
FY09 Sales: INR 4,640 mnAs a % of total sales: 26%
FY09 Sales: INR 2,090 mnAs a % of total sales: 12%
FY09 Sales: INR 2,820 mnAs a % of total sales: 16%
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SBU wise sales growth
6,4908,440
10,770
13,730
17,700
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 2,920 21% 28%
Engg. & Proj. 1,780 2,450 3,050 3,630 5,230 44% 31%
Sales (INR mn)
6,7638,801
11,146
14,046
18,007
FY05 FY06 FY07 FY08 FY09
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Key Profit & Loss metrics
PAT (INR mn)
Gross Sales/Income from Operations (INR mn)
EBITDA (INR mn)
CAGR (FY05-09): 28%
429
692869
1,432
1,798
FY05 FY06 FY07 FY08 FY09
CAGR (FY05-09): 48%
138
298390
731
894
FY05 FY06 FY07 FY08 FY09
CAGR (FY05-09): 60%
Diversified revenue mix across high growth verticals
15% 13% 12% 13% 12%
19% 18% 18% 17% 16%
22% 23% 24% 26% 26%
17% 17% 17% 18% 17%
27% 29% 28% 26% 29%
FY05 FY06 FY07 FY08 FY09
Lighting Luminaires Fans Engg. & Proj.
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Key Balance sheet metrics
Networth (INR mn)
Reducing debt-equity ratio Return on Capital Employed
807 9011,168
1,748
2,450
FY05 FY06 FY07 FY08 FY09
CAGR (FY05-09): 27%
2.1 2.1 2.0
1.4
0.9
FY05 FY06 FY07 FY08 FY09
9%
16% 17%
24%26%
FY05 FY06 FY07 FY08 FY09
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Other important metrics
Market Capitalization (INR mn) and Share Price (INR) as on March, 31st
1:1 Bonus during FY 08
15.8032.63
44.58 42.3151.69
42.31
51.69
FY05 FY06 FY07 FY08 FY09
Earning Per Share (INR)
CAGR: 60%
Return on Equity
18%
36% 38%
50%
43%
FY05 FY06 FY07 FY08 FY09
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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 6.60% 8.17% 8.06% 10.42% 10.16%
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%
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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%
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Table of Contents
Strategic Business Units
Annexure: Financials Statements
Key Highlights
Bajaj Electricals – An Overview
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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:
Overview Products
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APPLIANCES Total W. Heaters Mixers R. Coolers Irons Others
GOLY 28% 35% 28% 37% 18% 17%
CAGR (over 4 yrs.) 35% 45% 37% 31% 24% 30%
Sales Performance (INR mn)
1,4101,940
2,600
3,630
4,64040%
28%34%
38%
22%
FY05 FY06 FY07 FY08 FY09
Total revenue % Growth
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One of the leading players in small appliances market, especially in Mixers, Irons, OTG, Water Heaters and Room Cooler
Wide Product Portfolio and highly trusted brand in the small appliances market
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
Key highlights
Strong distribution network with more than 25,000 retail outlets
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Bajaj Platini Product Range
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Morphy Richards Product Range
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Products
• Domestic-use: Ceiling, Table, Pedestal & Wall mounted Fans, Personal Fans, Bajaj-Disney Children’s Fans
• Industrial-use: Industrial Exhaust fans, Commercial Air Circulators, Cooler kits and Pumps
Tie-ups
Overview Products
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FANS Total Ceiling TPW
GOLY 22% 25% 9%
CAGR (over 4 yrs.) 28% 29% 23%
Sales Performance (INR mn)
1,0901,410
1,8502,410
2,950
30%
22%
31%29%
10%
FY05 FY06 FY07 FY08 FY09
Total revenue % Growth
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Tie up with Midea – One of the leading fan manufacturing companies in the world
One of the leading players in fan industry with over 15% market share (source: IFMA)
One of the leading players in Premium segment
Key highlights
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
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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
Overview
Products
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LIGHTING Total CFL GLS&FTL Fittings
GOLY 19% 23% 10% 28%
CAGR (over 4 yrs.) 20% 61% 2% 21%
Sales Performance (INR mn)
1,000 1,0901,340
1,7602,090
31%
19%
4%
9%
23%
FY05 FY06 FY07 FY08 FY09
Total revenue % Growth
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Key highlights
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 fast. Significant capacity expansion in Starlite Lighting
• 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
One of India’s oldest lighting company with respected brand image
Good progress in CFL market
Acquired significant stake in Starlite Lighting - a strategic move
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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
Overview Products
Technical lighting Fire Alarms & Security systemsIBMS & HVAC
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LUMINAIRE Total Fittings HID
GOLY 23% 24% 15%
CAGR (over 4 yrs.) 24% 25% 17%
Sales Performance (INR mn)
1,2101,550
1,9302,300
2,820
19%23%
25%28%
25%
FY05 FY06 FY07 FY08 FY09
Total revenue % Growth
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One of the leading players in street Lights, flood Lights and industrial applications
Key highlights
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
Offers the latest and cutting edge Security and BMS (Building Management Systems) to its institutional customers in partnership with Delta Controls of Canada
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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.
Tie-up:
Overview
Products
Telecom Towers
Street Furniture
Power Distribution
Signages
Power Transmission
Illumination Projects
Sports Lighting
High Mast
CNC Profile Cutting Machine CNC Press Brake from LVD
Pole Welding Machine Welding of High Mast Section
GODREJ Make Shearing Machine
30,000 TPA Tunnel Enclosed Bath
Ranjangaon factory
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E&P TotalSpecial
Projects High Mast Towers
GOLY 44% 57% 39% 39%
CAGR (over 4 yrs.) 31% 56% 36% 15%
Sales Performance (INR mn)
1,7802,450
3,0503,630
5,230
19%
44%
87%
38%
24%
FY05 FY06 FY07 FY08 FY09
Total revenue % Growth
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Particulars TotalSpecial
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%
Division wise Sales Performance
15% 13% 16%28% 30%
32% 29%35%
39% 38%
53% 58% 49%33% 32%
FY05 FY06 FY07 FY08 FY09
Special Projects High Mast Towers
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
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One of the leading player in sports lighting, power plant lighting and High Masts space
Diversification into related businesses such as Rural Electrification etc
Key highlights
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
BAJAJ Engineering & Projects BU
GMC Balayogi Football cum Athletic StadiumHyderabad
Sawai Mansingh Cricket Stadium, JaipurSawai 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
Telecommunication Application
Antenna Mast for Reliance Infocom-VPT Project
Highmast for Telecommunication & Antenna Mast
Signages & Gantry
Largest National Flag (22 x 14 mtrs) installed at Kaithal & Ladwa in HaryanaThe India’s tallest mast 63 mtrs (48x72ft)Hoisted & lowered through high speed motorised winching arrangement. ThisMast is manufactured at Ranjangaon andErected by Bajaj E&P BU team
Flag MastInstalled at Kaithal & Ladwa, Haryana
Transmission 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
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Table of Contents
Strategic Business Units
Annexure: Financials Statements
Key Highlights
Bajaj Electricals – An Overview
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Key Highlights
Nationwide distribution network with wide urban and retail penetration
Strong financial track record
Robust, sustainable business strategy
Experienced management team backed by distinguished board
Strong brand positioning to drive growth
Diversified Product & Business portfolio – Both Consumer facing and Industry / Infrastructure facing
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Nationwide distribution network
Distribution network
• 19 branches
• 600 distributors
• 5,000 dealers
• 240 service centers
• 300,000+ retail outlets Lucknow
Depot
Mumbai
Pune
Nagpur
Ahmedabad
RaipurIndore
Noida
Jaipur
Delhi
Chandigarh
Bangalore
Cochin
Chennai
Hyderabad
Bhubaneshwar
Calcutta
GuwahatiPatna
Branch
Faridabad
Parwanoo
Goa
Ranchi
Daman
Zirakpur Dehradun
Has a strong pan India footprint and has displayed great
strengths in distribution, logistics & project execution…
plans to further amplify its retail network
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Strong brand positioning to drive growth
Bajaj Appliances
Tie up with Morphy Richards (UK) for manufacturing & marketing premium products in IndiaBajaj Platini introduced at the Premium endNew 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 Lighting
Significant network expansion undertakenSignificant capacity expansion in Starlite Lighting for CFLsFocus on Rural markets
Bajaj Luminaires
Tie up with Trilux Lenze (Germany) for premium technical lighting and RUUD Lighting (US) for LED New Foray into IBMS , HVAC , Fire Alarms and Security systems
Strong brand name created in consumer durables & lighting businesses over the last seven decades
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Experienced management team backed by eminent board
Shekhar Bajaj, Chairman & MD - Bajaj Electricals Ltd.
— Worked previously at Bajaj Sevashram and Bajaj
International
— Present on Board of Directors for Bajaj Auto
— Former President of ASSOCHAM, IMC, Elcoma, IFMA etc.
Eminent Board
Top Management
Anant Bajaj Executive Director
— 11 years of experience in the industry
— Holds a BCom and PGDFMB
— Director on Board of Bajaj
International
R. RamakrishnanExecutive Director
Shekhar BajajChairman & Managing Director
— 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
P. P. JatharExecutive VP & CFO
— 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
Madhur BajajDirector
V.B.HaribhaktiDirector
Dr.(Mrs) ShahaniDirector
Dr. R P SinghDirector
H. V. GoenkaDirector
A.K.JalanDirector
Ajit GulabchandDirector
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Robust business strategy
Leveraging strong brand equity
Created a strong brand name in consumer durables and lighting businesses over the last seven decadesContinuously focusing on brand building and expanding retail network
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 potentialFocusing on premium brands like Morphy Richards and Trilux and making them successful
Substantial market share
One of India’s leading players in the small appliances , fans and Lighting marketsOne of the market leaders in mixers, irons OTGs & water heatersStrong 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)
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BAJAJ ELECTRICALS LTD.
Thank you!