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EC Prasad, Chief Financial Officer (CFO) at consumer products maker Bajaj Electricals, has unveiled ambitious targets aimed at significantly expanding the company’s international presence. By Fiscal Year (FY) 27, Bajaj Electricals plans to increase its export revenue from Rs 70 crore to over Rs 300 crore.
“We see substantial opportunities in expanding our global footprint, especially in regions like the Middle East, Africa, and Europe,” Prasad said. “The impact of global warming has increased demand for cooling products, creating a favourable environment for our offerings in these markets.”
Prasad is focused on leveraging digital transformation. “We’re investing in AI, machine learning, and data analytics to drive more informed, data-driven decision-making,” he said. “This shift from judgment-based to analytics-driven strategies is crucial for our long-term success.”
The company has also leveraged efficiencies brought about by Artificial Intelligence (AI) and Machine Learning (ML) in its finance department, reducing staff from 300 to 90+. “These technologies have significantly improved our operational efficiency,” Prasad said.
Enhanced Manufacturing Capabilities
Prasad also highlighted the company’s focus on strengthening its manufacturing capabilities. “Our goal is to increase in-house manufacturing from 20 per cent to about 40 per cent by FY27,” he said. “This move will enhance our control over production, improve our negotiating power with Original Equipment Manufacturers (OEMs), and align with our forward and backward integration strategy.” Prasad emphasized the company’s commitment to sustainability, noting, “We are investing in green technologies and reducing our reliance on non-recycled materials as part of our broader corporate responsibility.”
To support these manufacturing and export targets, Bajaj Electricals has outlined a comprehensive Capital Expenditure (CapEx) plan. “Our CapEx plan is integral to achieving our manufacturing and export targets,” Prasad said. “These investments will ensure we remain competitive and responsive to market demands.” Last year, Bajaj Electricals invested close to Rs 200 crores in new products and manufacturing upgrades. This year, the company plans to allocate approximately Rs150 crores for similar initiatives.
Strengthening Cash Reserves for Future Growth
In parallel with its expansion and manufacturing goals, Prasad has set a significant target for strengthening Bajaj Electricals’ financial position. The company aims to grow its cash reserves from over Rs 400 crores to Rs 1000 crores by the end of FY26. “Cash is the most critical aspect for us,” Prasad said. “With a strong cash position, we can navigate tough times and invest in our future growth, both organically and inorganically.” This increase in cash reserves will provide Bajaj Electricals with the flexibility to pursue new opportunities and manage economic uncertainties effectively.
Achieving this target will involve stringent working capital management and leveraging profits, rather than reducing investments in critical areas. “Our focus is on maximising returns through effective working capital management and ensuring that we continue to invest in our core areas,” he added. “We will not be scaling back on investments in brand building or Research and Development (R&D), which are crucial for our long-term success.”
Optimistic Outlook Amidst Economic Challenges
Prasad’s outlook on the economic environment reflects both optimism and caution. “We’re seeing positive signs with urban demand remaining strong and rural demand showing signs of recovery,” he said. “However, high food inflation and unemployment are concerns that need addressing to boost consumer spending across the board.” Despite these challenges, Prasad remains confident in Bajaj Electricals’ ability to capitalise on emerging opportunities. “We’re seeing green shoots in the rural market, and anticipated interest rate cuts should help improve consumer sentiment,” he adds. “We’re preparing for single-digit, higher single-digit growth by the end of FY25, with expectations for improved margins in the latter half of the year.”
Innovative Product Development and Strategic Investments
Under Prasad’s leadership, Bajaj Electricals is placing a strong emphasis on innovation and new product development. “Half of our turnover now comes from new products, and we’re committed to maintaining this momentum,” Prasad said. The company plans to introduce another 50 per cent of new products over the next 18 months and is enhancing its financing schemes for distributors and retailers to support festive season sales. “We’re providing liquidity support to our partners to help them procure more of our products and improve their working capital cycles,” Prasad said.
Building Brand
Transforming Bajaj Electricals’ brand perception from a mass-market label to an aspirational one is a key priority for Prasad. “We’re investing heavily in brand building and communication to elevate our market position,” he says. The company is currently spending around 4 per cent of its top line on brand building, which is higher than the industry average. “We will continue to invest in our brands and potentially increase our ad spend to further strengthen our market presence,” he said.
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