"Bajel Projects: Connecting Communities with Reliable Energy!"
INTRODUCTION
Incorporated in 2022, Bajel Projects Ltd is in the business of Engineering, Procurement and Construction. Bajel Projects Limited (BPL) is a carved out legal entity from Bajaj Electricals Ltd. It’s EPC segment comprises of Power Transmission & Power Distribution. BPL provides end to end solutions ranging from inhouse design, testing, procurement, manufacturing, installation & commissioning of the projects.
- Market Cap ₹ 2,908 Cr.
- Current Price ₹ 252
- Stock P/E 114
- ROCE 6.19
- Promoter holding 62.6 %
- Debt to equity 0.32
Overview
1.BUSINESS OPERATIONS 
Key operations areas
Power Transmission
Power Distribution
International EPC
Monopoles
New Sector Co. is venturing into
Power Transmission:
This vertical has 3 subsegments namely Transmission lines, EHV Substations and EHV Underground cables, and has executed 7,000+ km of extra high voltage transmission lines and 40+ extra high voltage AIS /GIS substation projects providing electricity.
It has 25+ projects under execution with various states, central and private utilities
Power Distribution:
Company executes projects for construction of new infrastructure and augmentation of existing infrastructure for power distribution companies and agencies through Rural / Urban Electrification Primary Distribution Substation, Underground Cabling.
International EPC:
Company is equipped to meet the technical requirement of international projects with in-house design and engineering teams, tie-ups with Indian and foreign vendors, in-house Monopoles / Lattice Tower, manufacturing facilities and site execution teams Expanding globally with key projects in Africa, including electrification of villages. Securing distribution of orders for monopoles in various countries
Monopoles:
In-house design teams that manufacture a wide range of transmission and distribution poles .These steel monopoles have many advantages over standard lattice towers like space utilisation, shorter construction time, and environmental benefits .Bajel’s monopoles are witnessing increased popularity across India from clients
Sunrise Sectors:
🛜Data Centres: Entering the data centre construction and maintenance sector
Energy Storage Solutions: Developing systems for storing excess renewable energy
Metro Rail Projects: Expanding into urban metro rail construction
Renewable Energy: Focusing on solar and wind energy projects
2.SECTOR DETAILS
Renewable Energy is different in the sense that it needs to travel further distances, as the point of production is usually far away from where it’s finally consumed (eg. winds farms in Tamil Nadu may be producing energy to be consumed in Delhi, or solar parks in Rajasthan may be producing power for J&K etc.).Considering this, if India does not upgrade T&D infrastructure at an equal pace with power generation, a scenario may arise where generated power cannot be consumed. This would indeed be a disaster That’s why pure play T&D companies like Bajel will cater to a huge market.
3.GOVERNMENT BACKED
The Govt’s ambitious target to produce 500 GW of Renewable Energy (RE) by 2030, India’s T&D Infrastructure needs an urgent upgrade to support this goal
4.PROMOTER DRIVEN
Bajel is set to benefit massively from its powerful parentage with both Bajaj Electricals and Bajaj Finance Limited
Strong Support from Bajaj Electricals: Bajel can expect contracts and business support, boosting revenue and profits
Financial Backing from Bajaj Finance: Bajel will avail various financing facilities from Bajaj Finance, including working capital loans and bill discounting, ensuring smooth operations and financial stability
- Being part of the Bajaj Group gives it credibility, and can help it win large contracts from Govt. agencies for municipality work etc.
5. BUSINESS MODEL
The company’s business model revolves around delivering turnkey projects encompassing the design, engineering, testing, manufacturing, and execution of high-voltage transmission lines, substations, and underground cabling systems.They have over 20 years of experience in this sector and offer customized solutions to meet the specific needs of their clients.
They also engage in international projects, such as electrification efforts in Africa, and supply distribution poles to various countries.The company’s financial performance is driven by the successful completion of these projects, adherence to project schedules, and effective management of costs and resources
6.ORDER BOOK
The Company’s current order book stands at ₹4,000+ Crores as of 2024 and the order execution cycle is of 18-24 months, which gives a great revenue visibility to the company. It is well-positioned for sustained growth and value creation, driven by its strategic focus on core segments, expansion into new product areas, commitment to renewable energy, and international expansion.
7.FINANCIAL PERFORMANCE
GROWTH DRIVERS
Rising Energy Demand:
Both globally and domestically, the demand for electricity is rising, driven by economic growth, urbanization, and increased electrification across various sectors
Infrastructure Development:
The need for robust and reliable transmission and distribution infrastructure to support the growing energy demand and the integration of renewable energy sources is a critical growth driver
Projects like the Green Energy Corridor and international transmission line projects highlight this focus
Policy Support:
Government policies and reforms aimed at enhancing grid reliability, promoting renewable energy, and facilitating open access to the transmission network are significant enablers of growth in the T&D sector
NEGATIVES
Modest Profitability: Despite operational improvements, profitability remains a concern due to intense competition and cost management challenges
Working Capital Intensity: High working capital requirements due to long project cycles and significant receivables
Bajel Projects Limited (BPL) operates in a highly competitive Power Transmission and Distribution (T&D) sector characterized by low entry barriers, leading to intense competition
Historically, the company has faced challenges with cost overruns and operational inefficiencies that have impacted its profitability
POSITIVES
Bajel Projects Ltd is poised for sustained growth with a robust order book of ₹4,000+ Crores, promising revenue visibility over the next 18 - 24 months
The company’s strategic focus on T&D, coupled with expansion into new sectors, positions it well for long-term value creation
Co. has strengthened its international presence in Africa. It’s now targeting new markets in the Middle East, Europe, and South America which will help it mitigate risk and expand global footprint
Being part of the Bajaj Group gives it credibility, and can help it win large contracts from Govt. agencies for municipality work etc.
Company’s financials look optically bad because it has just begun generating profits on a standalone basis for 3 quarters. Companies going from loss making to profit making however, provide investors the best opportunity.
Screener link:
(Bajel Projects Ltd share price | About Bajel Projects | Key Insights - Screener)
Website link:
(https://bajelprojects.com/)
Annual report:
(https://www.bseindia.com/xml-data/corpfiling/AttachHis/8bb88e6c-04a6-4607-9d69-58189c812232.pdf)
Disclaimer: Invested and biased
6 posts - 3 participants