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business | IST

Bajaj Electricals sees sluggish September demand; says price hikes inevitable

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Since raw material prices still continue to rise, Bajaj Electricals would look at taking price increases again in October.

Bajaj Electricals is in focus, the stock has been buzzing and is up almost 35 percent in the last one month. Channel checks by Yes Securities also suggests that demand for electrical products, housing wires, premium and decorative fans, small kitchen appliances has been better than expected and dealers are optimistic about the upcoming festive season. In an interview with CNBC-TV18, Anuj Poddar, executive director, Bajaj Electricals, spoke about the situation on the ground.
He said, “It is a little bit of a mixed bag, post the lockdown, which is Q2, we started to see a good offtake. But since then, September has been slightly sluggish in terms of the continued rise. It is the start of the festive season, we are still hopeful. Post Ganesh Chaturthi, we have again seen a little bit of a dip. When I say sluggishness or dip, I mean that we are having to fight for the demand and the sales rather than compared to last year when things were just going off the shelves on their own.”
“So, there is a lot of push happening. All of us have had to take multiple rounds of price hikes this year, because of the commodity price pressures. So far till about July, that was well accepted by the market, we have had one more round of price increase in August and it is the first time we are starting to see a little reaction or resistance to the price increase. Therefore, we are waiting and watching on how things go. The peak festive season really starts off in October and we remain optimistic that in October, we should continue to see a revival,” he added.
Comparing with pre-pandemic levels, he said, “We are well above the 2019 numbers, 2020 as well was above 2019 and we do expect 2021 to continue to be above the 2020 numbers. So, to that extent, we are comfortable, but it's not an easy one this year, we are having to fight for that,” specified Poddar.
On raw material prices, he said, “It is still not okay because they continue to rise. We think we are in for another one or two rounds of price increase. The next one will probably be coming in October, we are planning about a 3 percent increase in certain categories that we had not taken, we will catch up.”
He further mentioned, “In terms of just the cost side pressures, we had seen some sense of stabilisation in the raw material prices, starting around July, but that didn't hold for very long and that has continued to be stable with slight upward bias on movement of costs. The recent news from China earlier this week, while it was not a positive news for many people in the market, we did believe that maybe it was a sign or a trigger for cooling off of some commodity prices, but 2-3 days post that news, it doesn't seem to be holding true. We will wait and watch as to how the commodity price trends continue to play out. We have to continue to protect our margins and keep taking price increases because we do not have an option.”
For the entire discussion, watch the video