Ladies and gentlemen, good day and welcome to Bajaj Electricals Limited Q2 FY 2026 earnings conference call hosted by Ambit Capital Private Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Dhruv Jain from Ambit Capital Private Limited. Thank you and over to you, sir.
Thank you. Hello, everyone. Welcome to the Q2 FY 2026 Earnings Call of Bajaj Electricals Limited. From the management side today, we have with us Mr. Shekhar Bajaj, Chairman, Mr. Sanjay Sachdeva, MD and CEO, Mr. E.C. Prasad, CFO, Mr. Vishal Chadha, COO, Consumer Products, Mr. Rajesh Naik, COO, Lighting Solutions. Thank you, and over to you, sir, for your opening remarks.
Good evening, ladies and gentlemen. I am Shekhar Bajaj here. Thank you for attending Bajaj Electricals Q2 earnings call. We hope you have had an opportunity to review our financial results and earnings presentation, which are available on the stock exchanges. At the outset, I would like to extend my heartfelt wishes for Diwali. Hope this new year brings joy and prosperity to you and your family. The government's announcement of comprehensive GST reforms featuring significant rate reductions across most product categories, marked a major milestone in simplifying India's indirect tax regime. While these reforms are expected to stimulate consumption in the second half, their rollout caused short-term transitional challenges during the quarter. The anticipation of GST cut rates led to pricing uncertainties across trade channels, resulting in temporary postponement of demand, even though our category was not directly impacted.
This was further compounded by the early onset of monsoons, which subdued overall demand. The summer products experienced weakness with overhang of shorter summer and higher channel inventories. In spite of high volatility in the electrical and consumer durables sector, our non-seasonal products, which like mixers, iron, and water heaters, have done well, registering a single-digit growth. Further, our lighting solutions vertical has delivered a standout performance for this quarter. It not only delivered 9.6% revenue growth, but also delivered a strong EBIT margin of 7.9%. We remain confident in our strategic direction and the resilience of our business model. With a continued focus on operational excellence, innovation and market responsiveness, we are well-positioned to navigate short-term headwinds and unlock sustained value for our stakeholders. Furthermore, with IMT forecast of strong winters, we are optimistic for our coming quarter.
Lastly, you all may have heard the announcement and exchange intimation of the resignation of our CFO, Mr. E.C. Prasad. He is moving on to take up an external opportunity. He joined us in November 2019 and has played a pivotal role in transforming Bajaj Electrical. Under his leadership, he led the demerger EPC vertical, transformed BL to a debt-free company, carved out a lighting solution vertical, and streamlined our overall business model. His contribution to the board and the company are invaluable, and we wish him luck for his future endeavors. With this, I now hand it over to Sanjay Sachdeva for our detailed business and financial highlights. Thank you.
Thank you, Chairman. Good evening, ladies and gentlemen, and thank you for joining our investor call. My wishes for Diwali and New Year. Hope this brings joy and prosperity to you and your families. As Chairman explained, this quarter has been marked by considerable volatility impacting the demand pattern of our consumer products verticals, mainly due to extended monsoon and GST rate reforms. The Lighting Solution vertical has done exceptionally well. We are observing price stabilization in the LED segment, which has augmented revenue growth. Not only it has delivered revenue growth of 9.6%, but the EBIT is up by 46% from INR 15 crore - INR 22 crore on a year-to-year basis. Year to date margins in the business remain at 9.2%, which is very encouraging. Further, consumer lighting witnessed double-digit volume and value growth in general trade also.
Our strategy to increase our revenue contribution in focus categories like ceiling lights and outdoor lights are showing results, and we expect the traction to continue going forward, including in quarter three. We had launched Switchgears in August 2025 and are very happy to see its progress. The initial response from the channel partners is encouraging, and it reinforces our confidence on the strength of our brand. Lastly, professional lighting has also delivered a good growth along with high single-digit margins. We expect, again, to continue this over the near future. In case of consumer products vertical, the first quarter of financial year 2026 had early onset of monsoon, and you know that. This has impacted sale our summer products even in Q2. The high channel inventory has put pressure on our sales to our distributors, to our trade.
Further, while GST rate reforms are sweeping, it did not have any impact on our ECD business. However, this uncertainty and anticipation of GST rate cuts led to pricing.
Ladies and gentlemen, the line for the management has been disconnected. Please stay connected while we join them. Ladies and gentlemen, the line for the management has been connected. Over to you, sir.
Let me talk few things again. We had launched Switchgears in August 2025 and are very happy with its progress. The initial response from the channel partners is encouraging, and it reinforces that we have a very strong brand. Lastly, professional lighting has also delivered good growth with high single-digit margins. We are confident this will continue over the next few quarters. In case of consumer products vertical, the first quarter of financial 2026 had early onset of monsoon, and you are aware of that, and this has impacted our sale of our summer products. Even in Q2, the high channel inventory has put pressure on primary sales, which is our sales from us to our distributors and to our channel partners. Further, the GST rate reforms are sweeping and did not have any impact on our ECD business.
But the uncertainty and anticipation of GST rate cuts led to pricing uncertainties across trade channels. This resulted in temporary postponement of demand. Further, when we dissect the results, while at an overall level, CP revenues are down by 4%, but certain categories have done well. These are categories like mixers, iron, water heaters, where Bajaj is an undisputed market leader, and where penetration levels are low, and overall growth is therefore in our favor. Now, this is where we have grown high single digit. Ceiling fans, in this quarter, we have grown by double digit, which again gives us confidence that for the resilience of our business. The drag in revenue is due to seasonal products like TPW, fans, and air coolers. We have improved our gross margins in this quarter. However, the fixed cost absorption is creating an operating leverage in this vertical.
Over the next few quarters, our focus stays to increase top line and improve market share, while continue to spend on the brands and other initiatives like go-to-market, digitization, manufacturing excellence, et cetera. Lastly, a few weeks back, as you know, our board had principally approved the acquisition of Morphy Richards Brand. This acquisition is in line with our strategy of dual brand architecture. We are very positive about this acquisition and expect this to play out well in the future. With this, I would like to open the call for questions. Thank you.
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Renu Baid from IIFL Capital. Please go ahead.
Yeah. Hi, good evening, team, and best wishes for Diwali to everyone. My first question pertains to understanding a bit more about what has been your read-through of demand pickup after the implementation of GST, the festive offtake, Diwali offtake in October. How has it been so far, and how do you plan to offset the inflationary pressures? To what range of price hikes being planned in this quarter or so? That's the first question.
Hi, this is Vishal. The initial estimations which we have about the festive month is that it's muted. Coming to the second question around inflationary pressures, we have already announced, in fact, price hikes in plans due to commodity price increase, and we are keeping a close watch. As and when we believe the market has the capability to absorb, as well as our own objectives, we will be taking further price hikes accordingly.
Sure. On the launch of Switchgear earlier this year, how has been that reception of the product from the trade and the channel, and what kind of investments have we done or we have planned to do in terms of GTM as well as on the product performance and launch here?
Okay. So, Renu, the launch event was very successful. Actually, we got orders much more than what we expected. We are still in the process of fulfilling those orders. We are yet to get feedback on the secondaries that is happening. Probably by the end of this quarter, we will come to know about the secondaries, but the primary pickup has been very great.
Right. Would this be a pan-India focus to start with or more regionally in terms of.
No. This is on a pan-India basis.
Sure.
There is no investment for this project.
It would be entirely bought out for us at this point in time.
Yes, that's right.
Got it. Right. Lastly, a bit more in detail in terms of while we have now as in Morphy, which is coming under our umbrella technically. This dual brand strategy of having Morphy clearly positioned across range for premium market, premium segment, and Bajaj for rest of the other categories. What kind of sub-segments are we looking to expand under the Morphy brand, and how do we plan to roll out our dual brand strategy in the market in the next couple of quarters?
We are still evaluating. Morphy already operates in categories like kitchen, personal care, et cetera, and we are still evaluating which other categories it could extend to. But in the short term, we expect it to continue to operate in the current categories it operates in.
Okay. Got it. Okay. Sure, sir. Best wishes. I have few more questions. I will be back in the queue. Thank you and all the best.
Thank you. The next question comes from the line of Achal Lohade from Nuvama Equity Investments. Please go ahead.
Yeah, good afternoon, sir. Thank you for the opportunity. Sir, if you could talk about these one-offs or recurring, if you could explain. You have talked about the warranty insurance claim. What is the like-to-like number in the previous quarters? How do we see this in terms of the numbers? Is there a positive net-net, YoY, QoQ? If you could give a comparable number for 2Q 2025 and also 1Q 2026.
This is the warranty insurance that we have taken on our warranties that we give. Last year it was an expense actually. The expenses far exceed the claims that we had got. This year, the claim received is much higher than the expenses and the delta what we are seeing there is about INR 13 crore.
Is it fair to say that.
It won't be one-off.
Basically, last year was impacted? Yeah. Going forward, does it make sense to say that you will have more likelihood of claims than really additional expenses? Is that a fair assessment?
Yes.
Okay. Second question I had in terms of the A&P spend, would you be able to quantify how much was that in 2Q 2026 versus 2Q 2025?
We have spent about 2.3% in this year as against 2.5% last year.
Sorry, when you are saying this year, you are meaning for the quarter or the first half, sir?
For the quarter.
For the quarter. Okay. This is as a percentage of total revenue, right? Not general CP revenue.
No. Total revenue.
Got it. And you have mentioned that you have seen a gross margin expansion. Would you be able to quantify and how much more headroom do we have in terms of gross margin expansion?
The VAVE is still going on. That is a continuous process that we have taken up. We have seen a significant improvement of close to 200 basis point improvement on the gross margin. And this is likely to continue. There will be even more benefits coming in through VAVE. Having said that, if there is a reason to pass on something to the market, we will have to do that.
Understood. If you could comment, for the key category like fans, water heater, irons. In terms of market share, have we kind of maintained, gained, or lost a little bit market share over last six months or whatever, 12 months?
Achal, I think it is more or less flat. I will not say it is a drop. It is a very thin margin. Somewhere we have gained in few decimals, somewhere we have lost in few decimals. It is more or less flat over the last six months.
On total basis it is flat. In certain categories we could have lost a little bit, or in certain categories we could have gained. There is no disproportionate change in any of the categories. Is that right understanding, sir?
Yes, that is right.
Understood. Even how October has played out, do you see that the worst is behind us, or you think the consumption-related pain is still around, we still have to wait for few quarters for us to have a double-digit kind of a growth in the CP business?
Achal, we are actually cautiously optimistic about what things are. The demand again, what you are seeing is skewed towards high-end consumer durables and all of that stuff. We did not see a lot of momentum happening in the small appliances. Having said that, I think there is much more money in the people's pocket because of all the reforms the government has done. We are optimistic that things might come back but we have to wait and watch.
Understood. Sir, if I hear.
I am so sorry to interrupt in between, sir. You may rejoin the queue for the follow-up question.
All right. Thank you.
The next question comes from the line of Nishita Shanklesha from Sapphire Capital. Please go ahead.
Yes, hello.
Yes, Nishita.
I had a question about the acquisition of Morphy Richards. When will this acquisition be value accretive to us?
It will be value accretive from day one. We are still in the process of getting the agreement signed. Hopefully, in a month's time we should be done with the agreement and then the value accretion will start immediately.
Okay, so how much incremental revenue do you see from this acquisition in H2 ?
We will save on the royalty that we are giving Morphy, the Glen, the parent company. Quantum we normally don't disclose, but we'll be saving on the royalty, which is a significant amount.
Okay. If you can quantify the royalty that you'll be saving.
No, we cannot because it's a sensitive information as far as the competition is concerned, so we won't be disclosing that.
Okay.
So.
Understood. No problem. Okay, if you can give any revenue guidance for FY 2026?
No, we don't give a forward statement. We would not like to do that.
Okay. No problem. Thank you so much.
Thank you. The next question comes from the line of Balas ubramaniam from Arihant Capital. Please go ahead.
Good evening, sir. Thank you so much for the opportunity. My first question, what is the revenue contribution share for new product development in this quarter? I think we have ambition to reach 40% of revenue. What is the timeline to achieve this target? What is the primary source for these innovations? For example, internal R&D or OEM partnerships , etc .?
Bala subramaniam, your voice is not very clear. What I could hear is, what is the contribution from NPD? That is around 40%. When I say NPD, that is a product that has been launched over the last two years.
Okay, sir. Sir, for Nirlep restructuring, what is the potential one-time financial impacts? Post-restructuring, what kind of impact do you expect?
As of now, where we stand, we do not see any major impact. We are still evaluating the various possibilities, and as and when we are closer to the deal, we will let you know.
Okay, sir. Sir, one small question. I think the launch of Turbo Prime BLDC. What is the plan to compete with specialized BLDC-focused players and a commoditized offering? What is the target market share for BLDC fans and how critical is this defending the core fan business?
Sorry, could you please repeat the question? I did not understand the question.
Sir, on that, I think the launch of Turbo Prime BLDC, and what is the plan to compete with specialized BLDC-focused players and commoditized offerings? What is the targeted market share for BLDC fans over the next three to five years' time frame?
I can't really comment on this Turbo, because I've no idea. We have launched. But I'll comment on the BLDC piece. BLDC continues to be a. At this moment in time, our BLDC contribution to our fans is around 15%-20%. As we all know, BLDC is a fast-growing market, so we will be coming up with new models and new offerings, and we will take our fair share in the market.
Sir, what is the market share, sir? Sorry. What is the market size for the industry?
Our understanding is that in value terms, BLDC is now a quarter of the total fan market.
Okay, sir.
Ceiling fan market.
Thank you, sir.
Thank you. The next question comes from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Hello. Hi. Thank you for the opportunity. As we can see from your presentation, your fan total have declined despite ceiling fan growing by double digit, means the TPW fan has seen a significant decline. Possible to conduct a range about what is the decline of TPW fan as well as cooler, and what is the TPW and ceiling fan mix?
Well, as can be inferred, TPW is a double-digit degrowth.
Okay.
Sorry, what was the second question?
Percentage of TPW.
We do not share that data, in terms of the split.
Okay. Got it. We see the lighting margin as still healthy, but although there is a decline sequentially, what is the reason for the same and how should we see the margin going forward? Secondly, once you will now enter Switchgear business, Switchgear margin would be in line with lighting or possibly it would be diluted because the business is at initial stage.
Sequentially, the margin-
-improved. Sorry. Please continue.
No, go ahead. I was just mentioning about Switchgear. It will be not diluting the overall margin of the lighting business. It will add to that because initial sales first quarter will be investing in DTR and other activity, so that we get the traction in the secondary as well as tertiary. Then it will be in line with what Lighting Solution is delivering. There will be no drag in the margins.
Got it. So lighting, I can see there is a sequential decline, like EBIT margin is 8%, while last quarter it was 11% sequentially. However, it is higher year-on-year. So how should we see the margin going forward, and whether you have given higher incentive this time, so there is a decline sequentially?
No, it's not because of that. It's because of the mix of the B2B versus B2C. That's why you see these changes quarter-on-quarter. Nothing to do with dilution in the margin. That's why the better comparison is with June 2024 last year, where we have increased from 6% - 7.9%. The B2B contribution of the last quarter was much higher, but it is highly margin accretive, and that's why the EBIT was close to 10%.
Understood. Got it. And how is the channel inventory on TPW and cooler side?
The channel inventory, as was mentioned in the opening remarks by managing director, continues to remain high.
Wonderful. Got it. Thank you. That's it.
Thank you. The next question comes from the line of Aniruddha Joshi from ICICI Bank. Please go ahead.
Yeah. Thanks for the opportunity. Sir, two questions. Now with this brand restructuring that is getting implemented, where does the brand Nex stand now? Because earlier there were a lot of hopes around that brand. Now, how should we think about Nex positioning? Question number one. Question number two, we have seen this year unusually higher rainfall even in October month, and even the small season generally, the summer product companies get due to October heat, that also seems to be washed out and again, that's called out by some of the paint companies or even, let's say, the ice cream, et cetera, also. So how do you see the season in Q3, in a way, working out? Yeah, that's it from my side.
Yeah. I'll take the second question first. You're absolutely right. There is usually a small second summer, which this time did not pan out, and that's why I said in the beginning that we do see a muted number in October also. Coming to the first question, we had indicated some time back that Nex is now a sub-brand under the Bajaj brand name. It's no longer independent brand as it was earlier. And with the two-brand strategy, which we have of Morphy as well as Bajaj brand, Nex will be a subset of the Bajaj brand.
Okay, sure, sir. This is very helpful.
Yeah.
Thank you.
Thank you. The next question comes from the line of Natasha Jain from PhillipCapital. Please go ahead.
Thank you for the opportunity, and good evening to everyone.
Good evening.
My first question. Sir, in your presentation, you have written that there is a single-digit value decline in domestic appliances. Could you call out which product category would these be?
Coolers.
Okay. Sir, because just below that, you have written coolers have witnessed double-digit value decline. I was not sure what would be the single digit in domestic appliances. Would that be geysers and water heaters?
Maybe coolers. It is coolers which have declined double digit. Water heater has grown, iron has grown. It is basically when we said DAP, that includes coolers then.
Got it. Okay. There is no product category basically with a single-digit value decline as mentioned in the presentation.
No, it is a combined.
Got it. Got it, sir. Just wanted to know your sense, how do you see the market for fans panning out, given a BEE rating is in the offing? Do you expect pricing pressures?
Yes, we do expect it. The new ratcheting starts from 1st of January 2026. With the channel already carrying high inventory, we do expect pressure on it.
Already, are you seeing any kind of pricing pressure amongst the brands or competition?
I can't comment on that.
Got it, sir. Thank you so much. All the best.
Thank you. The next question comes from the line of Rachna from Simple. Please go ahead.
Hello. Thanks for the opportunity. Sir, can you please give us some color on your kitchen appliances category? As you know, in the presentation, it is mentioned that we have seen a double-digit value growth. So how have our three brands, Bajaj, Nirlep, and Morphy Richards performed individually across core categories and channels? Also, if you could provide some color on the new products launched. Regarding Nirlep, we had earlier discussed plans to restructure the brand. Could you provide some color on that as well? Lastly, if you could quantify the contribution of kitchen appliances as a percentage of total ECD business and a ballpark figure regarding the EBITDA margins in the kitchen appliance category. That would be my question.
There is a lot of questions over there. I will start with the ones I remember. As far as the kitchen category is concerned, whether it is mixers or it is inductions or kettles, et cetera, we have grown in all the sub-segments of those. At a brand level, Nirlep has seen a decline and Bajaj has seen a growth.
Okay. Regarding channels, if you could quantify and the pace of new products in Bajaj brand.
Sorry, I did not understand the questions.
Which channels we have done well. We have done well across all channels.
Okay. How has the trend of.
Okay.
How has the mix of premium categories or premium products improved for us in the kitchen appliance category?
Yes. We have seen improvement in our premiumization in the mixers category, which we measure.
If you could quantify that.
No, we don't quantify those.
The contri.
High double digits.
Sorry?
It's high double digits growth.
Okay. The contribution of kitchen appliances as a percentage of total ECD business, if you could quantify that as well.
We do not unfortunately share that information either.
Okay, no problem. Thank you.
Thank you. A reminder to all the participants, you may press star and one to ask a question. A reminder to all the participants, you may press star and one to ask a question. The next question comes from the line of Manan Goyal from ICICI Securities. Please go ahead. Mr. Manan, please proceed with your question. Mr. Manan, please proceed with your question. Due to no response, we will move ahead with the next participant. The next question comes from the line of Manoj Gori from Equirus Capital. Please go ahead.
Yes, thanks for the opportunity. Sir, one question. I do understand that we currently, the inventory levels of fans are higher in the channel. Last time when we saw that star ratings were getting implemented in the December quarter, Bajaj especially was very aggressive in terms of pushing inventory into the channel and probably we registered somewhere around 50% growth in the December quarter for fans as a category. How do you read the situation here, whether channel would be influenced to stock more to get the benefit of the pricing, or how do you read the situation for current quarter? That's the first question.
While we do anticipate pressures in terms of stocking up of the channel, because this time is the second time, we are probably slightly better prepared in terms of navigating this change. I don't think it will be as much of push into the channel as probably happened the last time.
Right. Sir, at the portfolio level as Bajaj, as a group for consumer products, probably we have been taking initiatives to premiumize our positioning, from channel point of view, from consumer's point of view. How successful we have been, if you can quantify in numbers, probably let's say for FY 2025 versus FY 2021 or FY 2017, how has the progress been at the portfolio level? I'm not talking about for any specific category. If you can throw some light over here, it would be helpful.
In terms of the premiumization of our portfolio across all our core categories, we are progressing well, as I had mentioned earlier also.
But can you quantify it in numbers? Because earlier we used to talk about our numbers probably, like how numbers used to be. So sub economy for fans, we used to be around 92% few years back. We improved that to 76%. Can you throw some light? Because obviously when you say it is improved there, improvement can be anything. Just want to have some broad sense on how premiumization trend is playing out because we have been taking these efforts for years now.
So let's put it like this. We measure our premiumization by contribution of premium product to the total category.
Yeah.
And we keep measuring what is the percentage change in this. Suffice to add across categories, whether it is fans or whether it is mixer grinder or heater, we are growing anywhere between 100 - 300 basis points of contribution increase same time period.
And that 300 basis point increase every year we are seeing on the premiumization, sir.
Between categories it keeps changing.
Yeah. Okay, sir. Thank you and wish you all the best.
Thank you very much.
Thank you. A reminder to all the participants, you may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Achal Lohade from Nuvama Equities. Please go ahead.
Yeah, thank you for the follow-up opportunity, sir. Just a clarification. When you say channel inventory is high, is that for us? Is that for the entire industry?
Well, I'm assuming it's for the industry because everybody else faced the same early onset of monsoon.
And Achal, if you see the results, I think everyone more or less has reported the same amount of growth or degrowth. What we find from the channel partners is the inventory across is very high. Not only that, even the inventories of white goods is affecting the overall market, even for us.
Right. Okay. In terms of the, if even the channel inventory is so high, how do we look at this when you say you have announced price hike and you will not shy from taking further price hike? How do we add these two things? Is the industry also responding with price hike or it's only us who has taken a price hike?
Well, most of the players have announced price hikes. The way we typically would do it is we would do it in a calibrated manner, depending on the situation and the situation of inventory. So some places it will be a little higher, some places it will be a little lower, and in certain places we might need to plow back that in terms of additional channel incentives.
What is the quantum of increase we have taken, sir? We have announced, rather.
We have announced an increase of only between 1%-3%.
1%-3%. Since when, sir?
We cannot announce the exact date, but it will be sometime in November, early December.
Oh, you're planning for price increase. Understood. Sorry, I thought you have already taken price increase, you meant.
We haven't taken it as yet, but announced.
But announced.
We have announced it, but we haven't taken it, because we need to give advance notice to the partners.
Right. Understood. In terms of the BIS, there have been talks about BIS across other appliances as well. If you could highlight which other categories they are using, BIS is kind of getting implemented and how does it affect us in terms of whether it helps in terms of significant change in growth rate or not really, everybody is able to manage that part.
As of now, we are able to navigate and I have no comments at this moment in time.
Got it. That is all from my end, sir. Thank you so much.
Thank you. The next question comes from the line of Bala subramaniam from Arihant Capital. Please go ahead.
Thank you so much for the opportunity, sir. Sir, this AWE Plus Smart BLE LED lamp is compatible with Amazon Alexa and the Bajaj Smart app. What is the broader strategy for creating a connected home ecosystems? Is there any plan to integrate more appliances beyond lighting? How will you compete with larger tech and ecosystem players?
As a strategy, this was the first step we have taken in the lighting because it is the obvious integration which can be done with the Bluetooth. We are working to bring the complete ecosystem which is across home appliances. Whatever different can be managed through the app that we are working on. Once that is ready as a single app, we will come back to the market.
Okay, super. Thank you.
Thank you. The next question comes from the line of Dhruv Jain from Ambit Capital. Please go ahead.
Thanks for the opportunity. Sir, I have one question. If you look at the last four or five years, the consumer products business has grown maybe at 4% or 5% CAGR. We understand that there have been challenges around the industry, but over the next two or three years, in your view, how does this accelerate going forward? Or it is going to remain a little bit muted in the next few years if the industry challenges persist. Just want your thoughts that as how are you looking at your consumer products vertical as a whole over the next three or four years? Do you think double-digit growth is possible or it will be similar to what it is going on right now?
We do not give forward statement, but all that we can say is it largely depends upon how the market growth rates are. And we intend to maintain our market share or grow our market share. That will give you the idea that what kind of growth we should expect. But very difficult, as you could see this year, because of the season, the growth rate was very different from what we had predicted. Very difficult to say that, but you can add the two.
Fair enough. And sir, on the margin side, again, if we look at the margins in the consumer business, they have also come off significantly. How should we see that going forward? Apart from the VAVE initiatives and some of the cost initiatives that you are driving, do you think that in the next two or three years you could go back to those similar levels or it is just going to be a gradual recovery in your view?
There are two ways you should see margins. I think you are seeing the EBIT margin.
That's correct.
As you said, the FLM, which is our gross margin, that's improving, which is very good news, and it's improving handsomely. In spite of the fact that we didn't have a good quarter for summer products, we decided not to curtail our investment in many initiatives which think are good for us in the long term, and they are strategic in nature. Therefore, you see at EBIT level, we have not brought it down to. Also there is a deleverage because of the turnover coming down. When the things turn around and which we are sure is going to happen as we move forward, you will see margins coming back.
Sure sir. Just one bit on the Morphy Richards part, right? If you could just talk about how this acquisition will change the way this brand is being operated by Bajaj Electricals. I know the royalty bit, but apart from new product launches, how are you thinking about this piece?
I'm Shekhar Bajaj here. The whole idea is that we've been working with Morphy Richards for last 18 years. We've got another 12 - 13 years still to go. The issue is that by then we hope that suppose after so many years, our brand becomes very popular and we reach a level of INR 1,000 crore, and then suddenly they say, "We don't want to deal with you." All our effort to create the brand and all the amount which we've invested goes down the drain. Therefore, with this, we can now afford to spend money to do whatever is required to see that we are in a position to grow this brand because now it's our brand.
Fair enough. Thank you so much and all the best.
Thank you.
Thank you. The next question comes from the line of Mahesh from HDFC Securities. Please go ahead.
Hello, sir. Am I audible?
Yes, please go ahead.
Yes, sir. Regarding high channel inventory in fan, this is pertain to TPW fan or entire fan category?
The highest channel inventory is in TPW. Ceiling fan is high, but not a significant matter of concern as TPW is.
Okay. Regarding the BEE norms, whether the higher cost will pass to market in phased manner or in one go?
BEE cost, right?
BEE.
First, we will try to pass it off in a phased manner, depending on the situation and the competitive context.
Okay, sir. Last on lighting, sir, what is lighting B2B order book now?
INR 210 crore.
What was in this quarter last year?
Last quarter. Currently, it is INR 178 crore versus INR 210 crore last year. So INR 210 crore was last year's.
Okay, sir. Sir, just one more question, if you allow.
Yes.
What is Morphy the revenue mix in FY 2025?
Excuse me?
Morphy turnover.
We don't give that split.
Sorry, in earlier years you have reported in annual reports. In FY 2022, I think.
We can mention in terms of percentage terms, it varies anywhere from 6%-8%.
Okay, sir.
Thank you. The last question comes from the line of Rachna from Simple. Please go ahead.
Hello. Thanks for the opportunity again. As mentioned in the previous answer, B2B lighting revenue has been decreased to INR 178 crore. Is this a calibrated approach, and are we considering to increase the share of B2C lighting, given that it gives more better margins compared to B2B? Also, if you could give us some color on the product mix which helped us gain better EBIT margins this quarter.
Just to start with, from consumer lighting to professional lighting, yes, consumer lighting piece is much bigger and we are working on. That is why we said that our trade sales have improved high double digit in value as well as volume. We have clear focus to grow that, which gives us a little bit for increasing the market share. Also, we have changed the product mix. We are focusing on some focus categories which gives us better margins. So that is on the B2C side, it is the consumer lighting. On professional lighting, you must have seen that order intake has gone down a little bit. It was a delay. In October 1st week itself, we ordered these orders around INR 12 crore-INR 40 crore, which compensates or crosses the earlier mark what we had of the order book in the previous quarter last year.
That is not a concern. Normally, it is not like consumer lighting that it will be on regular basis, the same orders will be there. It can shift depending on the election, depending on the funds availability at the government and the infrastructure agencies. That is not a concern. Margin-wise, I think both businesses are delivering regular margins. Earlier, consumer lighting was low. With the product mix, we are trying to improve that. Professional lighting was not a concern.
Okay. Understood. Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to the management for closing comments. Over to you, sir.
Thank you very much for all the people who have joined. It was a good discussion, and we are hoping that the future will be much stronger than what has happened this year. Thank you.
Thank you. On behalf of Bajaj Electricals Limited, that concludes this conference. Thank you for joining us today, and you may now disconnect your lines.