Bajaj Electricals says new categories reach 25% of consumer lighting

In Q2, Bajaj Electricals said wires and switchgear contributed about 20%-25% of consumer-lighting sales, helping consumer lighting record double-digit growth despite softness in its core category. Switchgear sales rose 28% from a smaller base, while the company concentrated distribution and sales investment in four priority states.

How much do wires and switchgear contribute to Bajaj Electricals consumer-lighting sales?

Wires and switchgear contribute approximately 20%-25% of Bajaj Electricals' consumer-lighting sales, according to management's Q2 response to an analyst question. Management said the contribution from these new businesses could increase further, and described expansion of the categories as its plan.

The company did not disclose a rupee revenue run rate for wires, standalone switchgear revenue, or a target for financial year 2027 or financial year 2028. When asked about those measures, management instead said the wire business remained small and that its ambition was to accelerate it. The 20%-25% range is therefore the clearest disclosed indicator of the categories' current weight within consumer lighting.

What is driving Bajaj Electricals consumer-lighting growth?

Wires and switchgear are driving Bajaj Electricals' double-digit consumer-lighting growth, even though management described the core consumer-lighting category as soft in Q2. Switchgear grew 28%, albeit from a smaller base, while management said wires were seeing good traction.

The product mix differed from the wider Lighting Solutions vertical, which declined 1.3% in Q2 because professional-lighting revenue contracted. Management later described the professional-lighting decline as close to double digit, attributing it to lost bids in certain categories, selective order-taking during high inflation and some order slowdown. Lighting Solutions delivered earnings before interest and tax, or EBIT, of 3.1%, and management said professional lighting was more attractive than consumer lighting.

Where is Bajaj Electricals expanding its wires business?

Bajaj Electricals is concentrating its wires expansion in four states where management believes its brand is strong and the market is large. Management did not name the four states, but said the focused approach was intended to generate faster penetration and was helping consumer lighting grow in double digits.

The company is developing the wire business through a combination of wholesale channels, its current distribution network and incremental consumer-oriented distribution. Management said wire volumes were increasing month on month and acceptance was good, but it emphasised building quality distribution rather than simply expanding availability. The business is also adding sales capabilities and organisational structure while it remains relatively small.

What is Bajaj Electricals doing to scale wires and switchgear?

Bajaj Electricals is using brand investment, distribution development and added sales capability to scale wires and switchgear in selected markets. Management said it had made above-the-line, or ATL, branding investments for the new categories and that continuous investment would be needed because of their potential.

Management said the wire business would combine wholesale and distribution routes so it could address both segments. It is also building capabilities through its existing distribution structure and an incremental consumer structure. No completion date for these initiatives was disclosed, and management did not provide a comparison between its wires growth and industry growth.

What could limit the near-term benefit from new categories?

The immediate benefit from wires and switchgear could be limited if professional lighting continues to contract, because that business caused Lighting Solutions revenue to fall 1.3% in Q2. Management said it had lost certain project bids and had allowed some orders to go because elevated inflation made the pricing unsuitable.

Input-cost pressure remains relevant to the wider lighting portfolio. Management said metals and plastics had become more inflationary and that Bajaj Electricals took one round of price increases in lighting in October. It aims to absorb more than half of inflation through productivity improvements and use pricing for less than half, but the transcript did not quantify the October price increase.

How does the consumer-lighting expansion fit Bajaj Electricals' wider growth plan?

The consumer-lighting expansion supports Bajaj Electricals' aim to grow faster than its market, according to management. Management said that if the market grew 8%, it wanted to grow 10%, and if the market grew 6%, it wanted to grow 8%; it cited portfolio, distribution and innovation building blocks for that objective.

The company is balancing growth spending against profitability. In Q2, group EBIT margin improved by 140 basis points to 4.4% from 3.0%, while brand investment reached 3.8% of revenue, up 150 basis points year on year. Management said it could choose to invest behind a high-double-digit turnover opportunity rather than direct all benefits to margins, depending on market conditions and inflation.

Conclusion

Bajaj Electricals has established wires and switchgear as a 20%-25% component of consumer-lighting sales, helping that business grow at a double-digit rate while its core category remained soft. The 28% increase in switchgear sales and the stated month-on-month rise in wire volumes show that the categories are influencing the mix of consumer-lighting revenue, although the broader Lighting Solutions business still fell 1.3% because of professional lighting.

The next issue to watch is execution of the four-state distribution plan and the sales-capability build-out for wires. Management said the wire business remained small, its distribution and sales structures were work in progress, and further investment would be continuous; it also disclosed no financial year 2027 or financial year 2028 revenue target for the category.