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Financial Capital

At Bajaj Electricals Limited, financial capital is generated annually from surplus arising from the current business operations, as well as optimal mix of capital allocation across both streams of business.

Material Topics:

  • RESILIENT BUSINESS MODEL AND LONG-TERM PROFITABILITY

Linkage with UNSDG:

Total Revenues

4,813 crore

Total Equity

1,705 crore

Cash and Cash Equivalents

119 crore

Net Capital Expenditure

43 crore

Return on Capital Employed

13.1%

HOW WE MANAGE OUR FINANCIAL CAPITAL

India is one of the fastest growing markets despite the setback due to the COVID-19 pandemic. Even during the challenging period, the demand and consumption for Fast Moving Consumer Durables (FMCD) have continued to increase. Despite the pandemic, Bajaj Electricals has remained resilient and has continued its journey towards achieving substantial growth. The Company aims to manage its capital efficiently to optimise returns to its shareholders. The Company's capital structure is determined by management's assessment of the right balance of key aspects to suit its strategic and operational needs. The management considers the amount of capital in proportion to risk and manages the capital structure as per the evolving changes in the economic conditions and the risk characteristics of the underlying assets.

ENHANCING BALANCE SHEET STRENGTH

During the year under review, the Company continued with the overall focus of deleveraging its balance sheet by striking the optimum capital allocation across both the businesses. Through out the year, we focused on optimising our working capital, operating leverage and treasury activities.

Our operational KPIs are compared with internal and external benchmarks to achieve best production, higher productivity and yields. These initiatives provide better customer connect and reach, and higher realisations and result in cost optimisation to ensure positive cash flows from operations. The funds thereby generated were primarily deployed for debt and interest repayments. Allocations are also made towards strategic investments in subsidiaries and investments in capital assets including research and development. The surplus post the above deployment is then invested in short-term instruments from a liquidity aspect.

MANAGING CAPITAL – INPUTS

  • Strong EBITDA
    generation of

    318 crore

    supported by the CP business, which has grown by 14% and a decline in the losses in the EPC business during FY 2021-22.

  • Generated strong cash flow in operations of

    914 crore

    due to the risk calibrated approach taken for the EPC business. The capital employed in the EPC segment has reduced to the tune of H 400 crore, thereby providing a strong impetus to this cash flow from operations.


MANAGING CAPITAL – OUTCOMES:

  • Capex towards manufacturing plants, R&D initiatives and IT Infrastructure

    43 crore

  • Transitioning into a net debt-free Company after four decades

  • Undertaken several portfolio simplification initiatives

  • Nirlep Appliances Private Limited converted into Wholly Owned Subsidiary
  • Acquisition of controlling stake in Starlite Lighting Limited, subsequently followed by a scheme of merger into Bajaj Electricals Limited
  • Filed a scheme of demerger of Power Distribution and Transmission business into a separate listed entity (Bajel Projects Limited)
  • Highest short term credit rating upgrade from

    A1 to A1+

  • Strong Long term credit rating upgrade from

    A to A+

    supported by reduction in the debt and finance cost, and improvement in the profitability and liquidity ratios.

  • Proposed a dividend of

    3 per share

    and also framed a dividend policy, which will act as an indicator towards the future dividend pay-out.

  • Net cash of

    119 crore

    has also been achieved through focused efforts and actions.

INVESTOR ENGAGEMENT AND GRIEVANCE REDRESSAL

At Bajaj Electricals, the Company makes consistent efforts to maintain a continuous dialogue with its investors to keep them updated with the Company’s performance and growth plans. It believes in conducting consistent interactions with its shareholders to build trust in them and provide them with a platform to share their suggestions. The Company has a dedicated grievance mechanism process in place, which enables it to track concerns raised by the investors and resolve them at the earliest.

Way Forward


  • Continue to enhance balance sheet position
  • Maintaining flexible capital structure in line with the business needs to support growth opportunities
  • Making sound investments towards the intellectual capital with a strong focus on generating healthy return on investment
  • Focusing on shareholders’ wealth maximisation