India's Bajaj Electricals swings to loss on weak consumer product sales, labour code charge
- The Bajaj Group firm posted a consolidated loss of 341 million rupees
Indian appliance maker Bajaj Electricals, opens new tab swung to a quarterly loss on Monday, hit by a one-off charge linked to the country's new labour codes and a consumer products sales dip.
The Bajaj Group firm posted a consolidated loss of 341 million rupees ($3.76 million) for the third quarter ended December 31, compared to a 333.6 million-rupee profit a year earlier.
The consumer products division, which sells fans and home appliances and makes up most of the company's revenue, logged a revenue fall of 25% from a year earlier, pushing overall revenue from operations down 19% at 10.51 billion rupees in the reported quarter.
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Labour code-related charges stood at 288.9 million rupees.
Key context
India's new labour codes — the biggest overhaul of workers' laws in decades — have dragged profits of major corporate firms across sectors, from Godrej Consumer Products, opens new tab and Mahindra Holidays and Resorts India, opens new tab to Infosys, opens new tab.
Appliance makers in India, from AC maker Voltas to Crompton Greaves, are also battling higher metal prices, prompting some of them to raise prices to protect their bottom lines.
Cooling-product sales at Bajaj Electricals' consumer products division have been lacklustre for the past few quarters, after an extended monsoon hit first-quarter demand and left distributors cautious about restocking.
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