Bajaj Electricals targets BLDC-led fan recovery within months

Bajaj Electricals Limited said its Consumer Products business grew 2.4% in Q2 FY27 because fans declined by more than double digits, and management is targeting a recovery through a multifold brushless direct-current, or BLDC, fan capacity ramp within three to six months. BLDC fan sales rose more than 56% year on year.

Why did Bajaj Electricals’ Consumer Products growth lag in Q2 FY27?

Bajaj Electricals said the fan portfolio was the main reason Consumer Products grew only 2.4% in Q2 FY27. Management said fans declined by more than double digits, while Consumer Products excluding fans recorded double-digit growth across categories. That makes fan performance, rather than a broad slowdown across the division, the stated reason for the lower reported growth rate.

Kitchen and domestic appliances partly offset the fan decline in Q2 FY27. Bajaj Electricals said induction cookers, water heaters and steam irons grew at high-double-digit rates, while premium fans also performed well. The Consumer Products segment reported an earnings before interest and tax, or EBIT, margin of 4.0%, compared with a management-calculated 5.6% margin excluding incremental brand investment.

Management traced the fan weakness to the product mix. Bajaj Electricals said its portfolio had been heavily skewed towards entry-level, sub-economy induction fans, where it had not seen growth comparable with BLDC products. It also said the company lost some fan distribution and market share in FY22 and FY23 while changing its portfolio.

How will Bajaj Electricals turn around its fan business?

Bajaj Electricals plans to turn around fans by expanding BLDC production capacity and accelerating product innovation. Management said it was building capacity multifold from its current level and expected the new capacity to be in place in the next three to six months. In a later response on the same call, management said the factory build-out would take another four to five months.

The company said one fan innovation already launched in several states had done well, but it did not provide sales volumes, capacity figures or state-level revenue. Management’s stated plan is to add further innovations and use the wider production base to raise fan turnover and growth once the additional capacity is operational.

Management did not give a formal fan revenue target. However, when asked whether Bajaj Electricals could grow in line with the category over the next three to six months, management said that was what it was working towards and that it was confident. This remains a management objective rather than a reported result.

The plan is focused on shifting the mix towards faster-growing products. Bajaj Electricals said BLDC growth was faster than induction-fan growth, while its own fan portfolio had been underrepresented in BLDC relative to the market trend. The company therefore described capacity expansion as a way to support availability in the category it says is expanding faster.

What do BLDC fans contribute to Bajaj Electricals’ portfolio?

Bajaj Electricals reported BLDC fan growth of more than 56% year on year in Q2 FY27, and said BLDC was close to 17% of its portfolio. For the first half of FY27, management said BLDC fan growth was 26% year on year. The higher Q2 growth rate indicates faster year-on-year expansion in the quarter than across the first half.

BLDC’s growth did not prevent total fan sales from falling because management described BLDC as a smaller-base business and said the overall portfolio remained tilted towards entry-level induction products. Bajaj Electricals also said premium fans performed well but did not disclose separate revenue contributions for BLDC, premium induction and other fan categories.

Premium induction and BLDC fans together accounted for more than 30% of the portfolio in the first half of FY27, according to management. That mix measure is larger than BLDC’s close-to-17% contribution in Q2 FY27 because it includes premium induction fans as well as BLDC. The comparison shows that the recovery plan combines a BLDC capacity build-out with a broader premium-fan strategy.

How does the fan recovery plan fit Bajaj Electricals’ wider results?

Bajaj Electricals reported overall revenue growth of about 1.5% in Q2 FY27, while EBIT margin improved by 140 basis points to 4.4% from 3.0% a year earlier. A basis point is one-hundredth of a percentage point. Profit before tax more than doubled to Rs 35 crore from Rs 15 crore, despite management describing commodity costs as elevated.

Management said gross margin was maintained at 31.9% in Q2 FY27. It also cited a year-on-year gross-margin comparison of 32.1% against 31.4%, an increase of 70 basis points. Brand investment represented 3.8% of revenue in the quarter, up 150 basis points year on year, and management described this spending as an investment in strengthening the Bajaj brand.

Lighting Solutions moved differently from Consumer Products. The Lighting Solutions vertical declined 1.3% in Q2 FY27, mainly because professional lighting contracted, while consumer lighting grew in double digits through wires and switchgears. Switchgear grew 28% from a small base, and management said new businesses accounted for about 20% to 25% of the relevant total.

Professional lighting declined by close to double digits, management said, after Bajaj Electricals lost certain projects in bidding and chose not to take some orders amid high inflation. Management also cited some slowdown in orders, but said it was not a major contributor. In Consumer Products, e-commerce grew at a double-digit rate and exports showed very strong growth, without a disclosed percentage for either channel.

Conclusion

Bajaj Electricals has identified fans as the principal operating constraint on Consumer Products: the segment grew 2.4% in Q2 FY27 while fans declined by more than double digits, even as non-fan categories grew at double-digit rates. Its proposed recovery rests on moving from an entry-level induction-heavy mix towards premium and BLDC products, where BLDC sales rose more than 56% year on year.

The next disclosed execution point is the planned BLDC capacity ramp, which management expects within three to six months and later described as requiring four to five months for factory capability. Management is also working towards fan growth in line with the category over that period, while continuing brand investment that reached 3.8% of revenue in Q2 FY27.