Bajaj Electrical 1

INDUSTRY ANALYSIS - DESK RESEARCH

(215)

CONUMER DURABLE

BAJAJ ELECTRICAL

SUBMITTED BY

KUNAL D.HAJARE

MBA 2ND SEM

SEC: - C

ROLL NO.141325

NATURE OF THE INDUSTRY

Company Profile

Bajaj Electricals Ltd (BEL) (BSE: 500031) is an Indian consumer electrical equipments manufacturing company based in Mumbai, Maharashtra.[6] It is a part of the INR380 billion (US$6.0 billion) Bajaj Group. It has diversified with interests in lighting, luminaries, appliances, fans, LPG based Generators,[7] engineering and projects. Its main domains are lighting, consumer durables, engineering and projects. Lighting includes lamps, tubes and luminaries. Consumer durables include appliances and fans. Engineering and projects include transmission line towers, telecommunications towers, high mast, poles and special projects, and others include die casting, wind energy & solar energy.[8] Some notable project includes lighting works at the Commonwealth Games stadium and the Bandra Worli Sea Link[3]

It has 19 branch offices spread in different parts of the country with a chain of about 1000 distributors, 4000 authorized dealers, over 400,000 retail outlets and over 282 Customer Care centers.

History

It was incorporated in 14 July 1938 as Radio Lamp Works Limited under the Indian Companies Act, 1913 as a Public company limited. On 1 October 1960 it was renamed to Bajaj Electrical Limited.[9] In 1964, Match well Electricals (India) Limited, ("Match well"), a manufacturer of electric fans became a subsidiary of the Company and subsequently, with effect from July 1, 1984, the business and undertaking of Match well was amalgamated with the Company. In the financial year 1993-1994, Bajaj Electricals entered into a joint venture with Black & Decker Corporation, United States, for the manufacture and marketing of power tools, household appliances, and related accessories, through a separate company named Black & Decker Bajaj Private Limited, ("Black & Decker Bajaj"). During the financial year 1999-2000 Black & Decker Bajaj became a 100% subsidiary of our Company upon our Company acquiring a further 50% of the shareholding thereof from Black & Decker Corporation, pursuant to which Black & Decker Bajaj was renamed as Bajaj Ventures Limited. However, in the financial year 2002-2003, the Company divested 50% of its shareholding in Bajaj Ventures Limited and Bajaj Ventures Limited ceased to be a subsidiary of our Company. In January 1998, our Company established a new manufacturing unit at Chakan near Pune and commenced operations of manufacturing of fans and die-cast components. The production of fans at our manufacturing activities of the Match well unit also was gradually shifted to our Chakan unit. In September 1999, Bajaj established and commissioned a wind energy generation unit with an installed capacity of 2.8 mega watts at Village Vankusawade, Tal. Patan, District Satara, Maharashtra. The facility continues to run profitably till date.

In the year 2000-2001 the Company set-up our manufacturing facilities including a fabrication unit and a galvanizing plant at Ranjangaon, near Pune for the manufacture of high masts, lattice towers, and related products, and the said manufacturing facilities commenced commercial production with effect from April 1, 2001.

In November 2002, our Company entered into a technical collaboration and brand licensing agreement with Morphy Richards, United Kingdom, for the sales and marketing of electrical appliances under the brand name of "Morphy Richards" in India.

In the year 2005 the company entered into a Distribution agreement with Trilux Lenze of Germany for high end technical lighting.

In the year 2007, the company acquired 32% of the share capital of Starlite Lighting Limited, a company engaged in the manufacture of Compact Fluorescent Lamps ("CFLs").In 2012-2013, they have completely divested our stake and association with Black & Decker Corporation, USA.

Profit Margins of Bajaj Electrical

(Rs crore)

Mar ' 14

Mar ' 13

Mar ' 12

Mar ' 11

Mar ' 10

Per share ratios

Adjusted EPS (Rs) -0.53 2.65 11.78 14.76 12.88

Adjusted cash EPS (Rs) 1.94 4.10 13.04 15.85 13.82

Reported EPS (Rs) -0.53 5.13 11.83 14.66 12.00

Reported cash EPS (Rs) 1.94 6.58 13.09 15.74 12.95

Dividend per share 1.50 2.00 2.80 2.80 2.40

Operating profit per share (Rs) 8.18 11.10 23.97 25.84 24.60

Mar ' 14

Mar ' 13

Mar ' 12

Mar ' 11

Mar ' 10

Book value (excl rev res) per share EPS (Rs) 70.93 73.04 69.35 60.90 49.72

Book value (incl rev res) per share EPS (Rs) 70.93 73.04 70.24 61.82 50.68

Net operating income per share EPS (Rs) 403.11 339.59 311.01 277.09 228.20

Free reserves per share EPS (Rs) - - 67.21 58.76 47.56

Profitability

ratios - - - - -

Operating margin (%) 2.03 3.26 7.70 9.32 10.77

Gross profit margin (%) 1.41 2.84 7.30 8.93 10.36

Mar ' 14

Mar ' 13

Mar ' 12

Mar ' 11

Mar ' 10

Net profit margin

(%) -0.13 1.50 3.78 5.26 5.24

Adjusted cash margin (%) 0.48 1.20 4.17 5.69 6.03

Adjusted return on net worth (%) -0.74 3.63 16.98 24.24 25.89

Reported return on net worth (%) -0.74 7.02 17.05 24.06 24.14

Return on long term funds (%) 8.61 14.83 32.50 39.51 44.87

MARKET POSITION

BSE Mar 16, 17:00

214.60 -2.25 (-1.04%) VOLUME 33,355

NSE Mar 16, 17:00

214.55 -2.95 (-1.36%) VOLUME 93,183

Trade bodies Bajaj Electrical

Company Name

BAJAJ ELECTRICALS LTD.

Address 15/17, SANT SAVTA MARG, REAY ROAD, Mumbai - 400010, Maharashtra, India

Phone No.91-22-24064072/24064400

Fax no.91-22-24064003/24064181/22828252/23730504/23730505

Contact Person Mr. D. V. R. S. SASTRY (GM (product development))

Mobile 09969662948

Domestic and global spread of activity in Bajaj Electrical industry

In a strategic move, the Rs 503-crore Bajaj Electricals Ltd—part of the Bajaj Group—plans to establish the ‘Bajaj’ brand in 15 to 20 countries in the next few years.

According to Bajaj Electricals Ltd chairman and managing director Shekhar Bajaj: “As part of the strategy, we are planning to spread our wings in the international market for lighting products such as lamps and tubes—from countries such as South Africa and the Middle-East to other parts of Africa such as Nigeria, Kenya, Libya, Morocco, Tunisia and Algeria in 2004.

On the company’s new plans, said Bajaj Electrical Ltd president and chief operating officer R Ramakrishnan: “ ‘Bajaj’ fans are being sold in Iraq and the Middle-East and the company has recently started exports of the product to Nigeria as well. The company now wants to leverage ‘Bajaj’ fans in other parts of Africa, the UAE, Jordan, Kuwait, Saudi Arabia and Iran more aggressively. Similarly, ‘Bajaj’ room coolers are going to the UK and now the company aims to export the product to Egypt and Europe too.”

“Besides, we are now planning to export our high mast lighting and galvanized poles to the Middle-East, Saudi Arabia and UAE in 2004,” he added. The company recently started exports of high mast lighting and galvanized poles to Mauritius and the products have taken off well there. Till date, the engineering and projects business unit has executed the largest number of turnkey projects in lighting and associated electrical with a market share of above 70 per cent in India, explained Mr. Bajaj. Bajaj Electricals Ltd is now eyeing Thailand to enter into outsourcing arrangements with companies based there. This is because of certain strategic advantages in terms of cost and product features. The move is in line with the company’s on-going China sourcing strategy for components used in domestic appliances in India, Mr. Bajaj added.

“After having entered into brand licensing and strategic sourcing agreement with UK-based home appliance company, Morphy Richards Ltd, we are now in the process of manufacturing dry irons, oven toaster grillers and mixer grinders. Plans are on the anvil to implement manufacture of food processors for Morphy Richards in 2004. With the move, Bajaj Electricals plans to become a global supplier of select domestic home appliances to Morphy Richards,” Mr. Ramakrishnan said. As part of the marketing strategy, Bajaj Electrical is planning to introduce a concept of in-shop branding for ‘Morphy Richards’ brand within 100 premium retail outlets across the country. At present, Bajaj Electricals is in the process of marketing ‘Morphy Richards’ products through 2,000 retail outlets, he added. On the company’s new customer relationship management initiatives, said Mr. Ramakrishnan: “We are planning to promote ‘Morphy Richards’ products through appropriate ground-level activities which will include product demonstration, among others, in 25 towns, during Diwali 2004.

DOMESTIC MARKET Decorative 70% , Industrial 30%

GLOBALLY MARKET Decorative 50% , Industrial 50%

IMPACT OF THE COMING OF INTERNET/ONLINE AND MOBILE

The brand is beginning its 75th year - 1938 was when Bajaj Electricals was launched. We have our heritage in lighting. As a brand, we are in the lives of our consumers throughout the day. The challenge is being relevant, unlike a lot of brands and categories that come fairly early in a consumer’s life, our brand comes much later in the consumer’s life. A bulb, light, fan are products you wouldn’t normally buy, and you only buy kitchen appliances when you are setting up a home. So the consumer at this stage already has an understanding and awareness about various brands in the category. Last year, we launched an induction cooker, our research and test market findings showed that for the Indian consumer, time is of essence. Bajaj being the brand it is, the communication cannot be very cold, steely and hi-tech. The fact that the brand belongs to every home, is very important to us as we try to touch an emotional chord through our communication. We try to strike the right balance of technology with heritage values to stay relevant.

Bajaj was seen as a brand that had been around for many years, to some extent the male target group was more comfortable with it as we also have the auto heritage. But there is a lack of awareness; a lot of consumers are unaware that we are moving from bulbs and compact fluorescent lamps (CFLs) to light-emitting diodes (LEDs) to stay relevant. We have also tied up with a lot of international brands. Consumers don’t know that Bajaj is the brand that has a mixer-grinder and it is also the one to light up the Worli sea link. We are not seen as a technology-driven company.

Bajaj’s business segment caters a lot to government tenders; there is the Luminaries division and Engineering & Projects division which take up the whole gamut of work from designing to implementing. This includes street lighting, stadium lighting, special projects like the Bandra- Worli sea link and the Delhi Commonwealth Games. The consumer segment includes Appliances, Fans and Lighting. The tone and manner of all communication is warm, endearing and family-oriented. The target group for Kitchen Appliances is women in the 20-45 year age group, but when it comes to lighting and water-heating, the man takes precedence in purchase decisions. With Morphy Richards, we are very clear that the whole theme is ‘gifting’. The focus of communication is ‘put an end to useless gifting with Morphy Richards’. Keeping this in mind, we advertise during the festive and wedding seasons for the brand. Morphy Richards is more youthful, inspirational and in the modern retail format. Bajaj is endearing, warm and value for money. I would rather Morphy Richards cannibalize brand Bajaj rather than a Philips. Internally, it is not an issue - customer care is combined, and service centers for both are Bajaj. Only marketing and communication is separate. Both the brands co-exist in harmony.

Bajaj Electrical on Facebook

For a page with more than 90,000 fans, an active engagement of 1,458 people is abysmally low. And for a brand that has so much scope, it cuts a sorry figure. But the question is why it is so low? Is it because of the age groups the fan belongs to? Or is it because of the half-hearted effort of the team? The lack of interest in the brand’s fan can be felt in the following image where it is clearly visible that average response for the posts made on the brand’s wall is seriously low

Bajaj Electrical on Twitter

Bajaj Electrical have a more 990 followers – a number which is not impressive by any standard, though the content created here is relatively better than the one created for Facebook. Asian Paints have also used twitter to offer free giveaways to its fans a strategy which again should have found its place on Facebook.

BUSINESSMEN/PROFESSIONALS WELL KNOWN IN THAT INDUSTRY INCLUDING FIRST GENERATION

ENTREPRENEURS

Leadership

JAMNALAL BAJAJ (1884–1942)

The Bajaj Group of Companies was founded by Jamnalal Bajaj and enjoyed phenomenal growth. However, Bajaj's business interests were the means to a larger and holistic end.

KAMALNAYAN BAJAJ (1915–1972)

Kamalnayan Bajaj the eldest son of Jamanalal Bajaj started shouldering family responsibilities from an early age. After completing his education from University of Cambridge, England, Kamalnayan returned to India to assist his father Jamanalal, both in business and in social service. Kamalnayan was a man of strict principles, which he never swerved from. He had

earmarked a large portion of the income from his family business for public causes and social service programmers, the mantle of all of which he had inherited from his father. He always had

a sense of a larger social mission, transcending the dictates of business and the bottom line.

Every new business venture that Kamalnayan got into, eloquently testified to his legendary business acumen. With tremendous foresight and a spirit of zestful enterprise, Kamalnayan

acquired ailing industrial units and then miraculously turned them around. He went on to expand the business by branching into manufacture of scooter, three-wheeler, and cement, alloy casting

and electrical. In 1954, Kamalnayan took over active management of the Bajaj Group companies.

RAMKRISHNA BAJAJ (1924–1994)

Ramkrishna Bajaj, the younger son of Jamanalal, took over after the demise of his elder brother Kamalnayan Bajaj in 1972. In addition to shouldering business responsibilities, Ramakrishna’s energies were largely directed towards the social service and social welfare programmers of the

Bajaj Group. He was of the firm conviction that he could make an impactful and meaningful contribution to the community through social work. Ramkrishna had a flair and panache for

working with youth. He was elected as the Chairman of World Assembly for Youth (India) in 1961. He also held the office of the Managing Trustee of the Indian Youth Centers Trust, which conceived and created the Vishwa Yuvak Kendra in 1968, a trail-blazing organisation in youth

development.

RAHUL BAJAJ

Rahul Bajaj, the chairman and managing director of the Bajaj group, is one of India's renowned industrialists and is internationally respected for his business expertise and entrepreneurial character. Rahul Bajaj is the grandson of Jamnalal Bajaj, who founded the Bajaj Group. He completed his schooling from Cathedral, a school in Bombay. Then he further pursued his

studies from St Stephen's College, Delhi and Harvard University, USA. He took over control of the Bajaj Group in 1965 and successfully established one of India's best companies.

Controlling ministry of Govt of India

Bajaj Electrical has a lean and tightly controlled cost structure. Fixed cost form a small part of its

Operating income. Consequently, operating profit at 18.8% is well above any other automobile

Company in the country.

As on 31 March 2013, VAT refund of approximately ` 1,100 crore is yet to be realized from

The Government of Maharashtra. Such unrealized VAT refunds extended the working capital

Cycle of the Company. Surplus cash and cash equivalents, as on 31 March 2013, stood at ` 5,706 crore versus 5,451 crore as on 31 March 2012. The surplus funds are invested in

fixed income Securities rated P1+ and equivalent for short term investments, AA+ and above rated Securities for long term investments, and Fixed deposits with banks.

As required by ‘the Companies (Auditors’ Report) Order, 2003’, as amended by ‘the Companies (Auditors’ Report) (Amendment) Order, 2004’, issued by the Central Government of India in

terms of sub-section (4A) of section 227 of the Act (herein after referred to as the “Order”), and on the basis of such checks of the books and records of the Company as we considered

appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

State, National, Global policy and issues impacting

After incurring losses in FY14, Bajaj Electricals is looking at a turnaround in its bottom line FY16 onwards on account of higher earnings from its lighting business and by reducing losses in the engineering & projects (E&P) division. The company is confident of posting Rs 4,600-crore revenue this fiscal, up from Rs 4,030 crore in FY14. During FY16, it expects to clock a top line of Rs 5,500 crore, chairman & managing director Shekhar Bajaj said on Friday.

According to Bajaj, apart from a larger share of the fast growing Light Emitting Diode (LED) market in India, Bajaj Electricals is banking on a higher profit contribution from new projects in its E&P business to turn around its earnings from FY16.

For its lighting & luminaries (L&L) business, the company is focusing on sales to other business entities (B2B Sales) as retail sale of LED lights in India is not mature enough for a complete replacement of CFL bulbs. Bajaj Electricals recently partnered with networking equipment major Cisco Systems to bid for lighting solutions of the 100 smart cities that are due to come up in India.

According to Bajaj, the recent thrust on the use of LED lighting in public properties by the government will benefit the company. “Bajaj Electricals has always been a trusted brand in street and office lighting and the LED business has a higher margin than CFL,” he said.

LED bulbs have a much longer life-span and consume 50% less electricity than CFL. To change the mindset of retail consumers and educate them about the benefits of LED bulbs over CFL, Bajaj Electricals on Friday launched ‘The Science of Light’ campaign.

Bajaj said within the next five years, LED would be contributing 80% to Bajaj Electricals’ lighting and luminary’s business revenue. Due to a lower-than-expected recovery of the infrastructure sector in India this year, Bajaj Electricals has lowered its revenue estimates to Rs 4,600 crore from Rs 5,000 crore earlier. Being lighting and consumer durable company, a slowdown in the sector directly hits Bajaj Electricals sales. “I am confident this year will be better than FY14,” Bajaj said. According to him, a delay in delivery of projects that Bajaj Electricals was working on in the past few years adversely impacted the company’s profitability last year.

Fiscal policy, export import policy impacts

Anant Bajaj, joint managing director, Bajaj ElectricalsMumbai: Bajaj Electricals Ltd, a maker of lights, fans and appliances, will increase its focus on two

diverse markets—rural and exports—as a part of its turnaround strategy, after the company posted its worst fall in profits in over a decade. The company wants to double its revenue from exports by scaling

up in regions where it already exists and entering new markets. “This (fiscal) year we will end with about Rs.45 crore of turnover from exports, which is roughly around 1% (of Rs.453.93 crore total revenue from

the Consumer Durables vertical as on 30th September), and will increase it to around Rs.100 crore by next year,” said Anant Bajaj, joint managing director. Some of this additional export revenue will come

from South America and South East Asia, where the company plans to expand. “We are looking at opening up new branches overseas. Currently, we are strong in the Middle East and Africa and are looking at expanding into another 25-30 markets from around 30 regions where we are selling our products currently,” said Anant Bajaj. “Exports are a major area the company wants to explore as

customers are ready to pay a premium if it is India-made product,” he said. Bajaj Electricals reported a loss of Rs.16 crore in the September quarter, its worst in a decade, because of tepid demand. The festival season just gone by gave nothing to cheer about. “Both Diwali and Onam sales disappointed even though

the company invested heavily in promotions,” said Bajaj. “We are expecting 15% growth in consumer durables and lighting segment compared to 25% growth on average in the past seven years,” said P.S.

Tandon, executive president (appliances business unit), Bajaj Electricals.

The company, according to a Bloomberg poll of analysts, is likely to report an estimated net profit of Rs.18.54 crore and net sales of Rs.1, 060.5 crore in the December quarter. The competitors of Bajaj Electricals such as Havells India Ltd, TTK Prestige Ltd and V-Guard Industries Ltd are also adding dealer networks all over the country to push their products in the rural areas where penetration is low.

According to Hitesh Taunk, consumer analyst at ICICI Securities, “Players like Havells India are also investing heavily in branding and advertisements to increase penetration.” “Urban discretionary spending is in a cyclical slowdown, and consumer durables have seen double-digit volume declines for two consecutive years,” Credit Suisse Securities Research and Analytics said in an 8 January report titled India Consumer Discretionary Sector. “We do not expect a near-term recovery for the sector, as urban wage growth remains muted, the government pay commission is 2-3 years away, and inflation remains in double digits naturally, rural penetration is an area of focus for Bajaj Electricals.

We are not looking at diversifying but are expanding our reach in the rural segment. Since growth is faster in the rural areas than the urban, we are targeting a total of 150-175 Bajaj World stores by March 2015, of which 60% stores will be in the rural areas,” said Tandon “Rural penetration is a long-term story for the next five years and it (Bajaj’s plans) is along the lines which most companies are doing in the consumer space,” said Sanjay Manyal, sector analyst with ICICI Securities Ltd. Also, “if the currency remains at these levels (Rs.62 per us dollar), import cost may remain elevated, so it should be a positive that Bajaj Electricals is expanding their share in the export market”, Manyal added. Bajaj expects the second half of the fiscal year will be better following the closure of unviable projects. “We have taken tough calls in the engineering and projects (E&P) business in the past year as we decided to shut old projects which were unviable, had time and cost overrun. We have already taken in a hit in the past few quarters,” Anant Bajaj. Bajaj Electricals is, in fact, bullish about its E&P business. “Bajaj Electricals is targeting order book of Rs.1,500 crore by the end of current fiscal in E&P division from Rs.700 crore in the beginning of April. Around 80% of Rs.1,500 crore will include new orders,” said Shekhar Bajaj, managing director of Bajaj Electricals. “Engineering and projects division is recovering, which has been supporting the share price,” said Manyal. Bajaj Electricals has outperformed the broader markets since the beginning of December, rising 33% compared to the Sensex’s 2% decline

M&A (mergers and acquisitions) in that industry at national and global level

Project Synopsis

Marceline’s Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an

organization to sustain its competitive advantage.

Project Description

Market Lines'' Bajaj Electricals Limited Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments report includes business description, detailed reports on mergers and acquisitions (M&A),

divestments, capital raisings, venture capital investments, ownership and partnership transactions undertaken by Bajaj Electricals Limited since January 2007.

Scope

Provides intelligence on Bajaj Electricals Limited’s M&A, strategic partnerships and alliances, capital raising and private equity transactions. Detailed reports of various financial transactions undertaken by

Bajaj Electricals Limited and its subsidiaries since 2007.Information about key financial and legal advisors for Bajaj Electricals Limited’s financial deals transactions.

Financial deals tables and charts covering deal value and volumes trend, deal types and geography-based deal activity.

Highlights

This report includes Bajaj Electricals Limited’s contact information and business summary, tables, graphs, a list of partners and targets, a breakdown of financial and legal advisors, deal types, top deals by deal value, detailed deal reports, and descriptions and contact details of the partner, target, investor, and

vendor firms, where disclosed.

The profile also includes detailed deal reports for all M&A, private equity, public offering, venture financing, partnership and divestment transactions undertaken by Bajaj Electricals Limited. These deal reports contain information about target company financials, sources of financing, method of payment,

deal values, and advisors for various parties, where disclosed.

Reasons to Purchase

Access comprehensive financial deals data along with charts and graph covering M&A, private equity, and partnerships and alliances.

Form an independent opinion about Bajaj Electricals Limited growth strategies through the organic and inorganic activities undertaken since 2007.Track your competitor’s business structure and growth

strategies.

Technological development impact

Beena Leji Koshy,

Senior GM & Head, Advertising and Brand Development,

Bajaj Electricals,

Talks about challenges in keeping the brand relevant to today's hi-tech generation, the difference between positioning for Morphy Richards and Bajaj and using the digital

The brand is beginning its 75th year - 1938 was when Bajaj Electricals was launched. We have our heritage in lighting. As a brand, we are in the lives of our consumers throughout the day. The

challenge is being relevant, unlike a lot of brands and categories that come fairly early in a consumer’s life; our brand comes much later in the consumer’s life. A bulb, light, fan are

products you wouldn’t normally buy, and you only buy kitchen appliances when you are setting up a home. So the consumer at this stage already has an understanding and awareness about

various brands in the category. Last year, we launched an induction cooker, our research and test market findings showed that for the Indian consumer, time is of essence. Bajaj being the brand it is, the communication cannot be very cold, steely and hi-tech. The fact that the brand belongs to

every home, is very important to us as we try to touch an emotional chord through our communication. We try to strike the right balance of technology with heritage values to stay

relevant. Bajaj was seen as a brand that had been around for many years, to some extent the male

target group was more comfortable with it as we also have the auto heritage. But there is a lack of awareness; a lot of consumers are unaware that we are moving from bulbs and compact

fluorescent lamps (CFLs) to light-emitting diodes (LEDs) to stay relevant. We have also tied up with a lot of international brands. Consumers don’t know that Bajaj is the brand that has a mixer-

grinder and it is also the one to light up the Worli sea link. We are not seen as a technology-driven company.

Bajaj’s business segment caters a lot to government tenders; there is the Luminaires division and Engineering & Projects division which take up the whole gamut of work from designing to

implementing. This includes street lighting, stadium lighting, special projects like the Bandra- Worli sea link and the Delhi Commonwealth Games. The consumer segment includes

Appliances, Fans and Lighting. The tone and manner of all communication is warm, endearing and family-oriented. The target group for Kitchen Appliances is women in the 20-45 year age group, but when it comes to lighting and water-heating, the man takes precedence in purchase

decisions. With Morphy Richards, we are very clear that the whole theme is ‘gifting’. The focus of communication is ‘put an end to useless gifting with Morphy Richards’. Keeping this in mind,

we advertise during the festive and wedding seasons for the brand. Morphy Richards is more youthful, aspirational and in the modern retail format. Bajaj is endearing, warm and value for

money.

I would rather Morphy Richards cannibalize brand Bajaj rather than a Philips. Internally, it is not an issue - customer care is combined, and service centers for both are Bajaj. Only marketing and

communication is separate. Both the brands co-exist in harmony.

We have a wide range of products catering to every segment. Whether a consumer wants a value-for-money product or an aspirational one, we have a product for each requirement for your

home. Also, ours is one of the largest networks of service centers, totaling about 238. This is a great advantage in a country like India, where the consumer will not discard the product once it

becomes dysfunctional, but will want to get it repaired.

Labor unrest, personnel issues, corporate wars and fueds

Personnel issues in Bajaj Electrical

Even as the Bajaj imbroglio comes up for hearing before the Company Law Board (CLB) on October 23, there is every indication that this might turn out to be the longest-running family feud of all times. Developments in the last few days clearly show that Rahul and Shishir, the warring brothers, have drifted further apart rather than moving towards a solution.

First, the two announced that the four-year-old family settlement had fallen through. Next, Shishir, in a move aimed at consolidating his holding in Bajaj Hindustan, the country's largest sugar producer that he controls, bought 4.67 per cent in the company from the market.

Bajaj Auto, which is controlled by older brother Rahul, had bought 3 per cent in the company a few months ago. Bajaj insiders admit that finding a solution to the imbroglio is not easy because of the way the family holding is structured. Jamnalal Bajaj, the founder of the group and a close associate of Mahatma Gandhi, had two sons: Kamal Nayan and Ramkrishna.The interests in the family holding companies were equally divided between the two. Kamal Nayan's stake was equally divided between his two sons, Rahul and Shishir, while Ramkrishna's was trifurcated between his three sons: Shekhar, Madhur and Niraj.

Thus, Rahul and Shishir have 25 per cent each of the family stake in the group's main investment vehicle, Bajaj Sevashram, while their three cousins own 16.67 per cent each. Bajaj Sevashram holds the Bajaj family's interests in all group companies directly and through subsidiaries. It has a wholly-owned subsidiary, Jamnalal Sons, and a 78 per cent subsidiary, Bachhraj & Co.