Bajaj Electricals to increase its play in premium segment, says CEO Poddar

Managing Director and CEO Anuj Poddar said Bajaj Electricals is ramping up its play in the premium range in appliances and other segments, and expects the revenue contribution from high-end products to increase as several new launches line up.

The company recently launched a new brand ‘Nex’, which will target high-end urban consumers with its premium range of devices.

Despite slowdowns in some segments, Bajaj Electricals will launch new products in premium spaces and at Morphy Richards in the latter half of this year.

In general, as a company, you would expect a much larger contribution from the premium segment, he said.

“We focus on two things — elevating the brand and product excellence — through new product launches,” Poddar told PTI.

He added that these two things help the company to increase its market share and the Bajaj Group Company will continue to focus on this strategy.

During the current market scenario, Poddar further said that there is a “slowdown in demand” in the market for categories such as fans where the star rating has been applied.

“There’s an increase on the cost side, to comply with that and we haven’t been able to fully pass through. Similarly in the other categories, demand is soft. There’s a certain discounting and so forth that we all resort to and that’s impacting margins,” he added.

The company expects to launch new products and premiums will help it maintain its revenue growth.

“It may or may not be volume growth, but with more product launches at least from ASP (average selling price) and portfolio mix, that’s where we’re seeing change,” he said.

In the fourth quarter, total revenue from the fan segment was flat and there was a decline in the sub-economy category, but Bajaj Electricals delivered growth in the premium segment.

“Similarly in consumer lighting, we saw a pullback due to weak demand but more than made up for it in professional lighting,” Poddar said, adding, “It’s more about balancing our portfolio and doing the right things in situations when actual demand is weak.”

According to him, fans in the sub-economy in fiscal ’22 contributed 74 percent of sales in the category, which has now fallen to 67 percent as the contribution from the premium segment increases.

“This shows a positive change in the portfolio mix,” he said.

Similarly, in other segments such as mixer mills, sales of high-value products have increased.

Bajaj Electricals’ revenue from consumer products, which includes appliances, fans and sales from Morphy Richards, was Rs.3,764.24 crore. While its lighting solutions business contributed Rs 1,125 crore.

When asked if Bajaj Electricals had any plans to get into compressor-based refrigeration product segments such as air conditioners or refrigerators, Poddar said, “We have no intention of getting into that.”

During distribution expansion, the company’s focus is on increasing sales through distribution. The company is also seeing good growth coming from modern trade channels with the help of its premium portfolio.

“Online, we’re doing fairly well,” he said, adding that it contributes 12 percent to sales of its consumer products.

Besides consumer products and lighting solutions, Bajaj Electricals is also present in the EPC (Engineering Procurement and Construction) sector where the company carries out projects related to power transmission, distribution and lighting.

Earlier this month, Bajaj Electricals announced a 13 per cent growth in its consolidated revenue from operations to Rs. 5,339.69 crore for the financial year ended 31st March 2023.