Morgan Stanley has reiterated an ‘Underweight’ rating on Bajaj Electricals, with a target price of ₹481, implying a 22% downside from the current market price of ₹616.45. The brokerage flagged significant underperformance in the company’s first-quarter earnings for FY26, both on revenue and profitability fronts.
For Q1FY26, Bajaj Electricals reported a decline of 8% in revenue, 56% in EBITDA, and 70% in adjusted PAT on a year-on-year basis. Adjusted PAT fell 78% below Morgan Stanley’s estimate and 69% below street consensus, underscoring operational pressures.
In the consumer products segment, revenue declined by 11% against Morgan Stanley’s estimate of 7% growth, with EBIT margin plunging to -1.7% versus an expected +3.6%. In contrast, the lighting solutions business reported 3% revenue growth (vs estimate of 12%) and 10.6% EBIT margin, which was slightly ahead of the estimated 9%.
The company also reported an exceptional loss of ₹67 million, attributed to an ex-gratia payout for employees at the Nashik factory.
Disclaimer: The views and recommendations expressed by Morgan Stanley are their own and do not represent the opinion of this publication. Investors are advised to consult a certified financial advisor before making any investment decisions.
