Bajel Projects Ltd Reports Mixed Quarterly Results Amid Margin Pressures

Quarterly Financial Performance: A Mixed Bag

The December 2025 quarter saw Bajel Projects report net sales of ₹562.34 crores, marking the lowest quarterly revenue in recent history. This decline has weighed heavily on the company’s top line, reflecting ongoing challenges in the heavy electrical equipment industry, including subdued demand and competitive pressures. Despite this, the company’s financial trend score has improved from -3 to -2 over the past three months, indicating a shift from flat to a cautiously positive outlook.

Operating profit before depreciation, interest and taxes (PBDIT) reached a quarterly high of ₹27.16 crores, underscoring better cost control and operational leverage. The operating profit to net sales ratio also improved to 4.83%, the highest in recent quarters, suggesting enhanced margin management despite revenue pressures. Bajel’s operating profit to interest coverage ratio rose to 1.67 times, the strongest in the last year, signalling improved ability to service debt obligations.

Profitability and Returns: ROCE and PBT Insights

Return on capital employed (ROCE) for the half-year period ending December 2025 stood at 13.72%, the highest recorded in recent periods. This improvement reflects more efficient utilisation of capital and better earnings quality. Profit before tax (excluding other income) also hit a quarterly peak of ₹3.32 crores, indicating that core business operations are edging towards profitability.

However, Bajel Projects continues to face challenges on the bottom line. The company reported a net loss after tax (PAT) of ₹0.42 crores for the quarter, a sharp deterioration of 113.1% compared to the previous four-quarter average. Earnings per share (EPS) also declined to a negative ₹0.04, the lowest in recent quarters. A significant factor contributing to this loss is the high proportion of non-operating income, which accounted for 59.46% of profit before tax, highlighting reliance on non-core activities to bolster profitability.

Stock Price and Market Performance

Bajel Projects’ stock closed at ₹163.00 on 6 February 2026, down 4.12% from the previous close of ₹170.00. The stock has experienced considerable volatility over the past year, with a 52-week high of ₹262.00 and a low of ₹142.75. Year-to-date, the stock has declined by 6.02%, underperforming the Sensex which has fallen by 1.92% over the same period. Over the last one year, Bajel’s stock has plummeted 27.26%, contrasting sharply with the Sensex’s 7.07% gain, reflecting sector-specific headwinds and company-specific challenges.

Mojo Score and Analyst Ratings

Bajel Projects currently holds a Mojo Score of 37.0, categorised as a 'Sell' rating. This represents an upgrade from the previous 'Strong Sell' grade assigned on 7 October 2025, reflecting the company’s improving financial trend and operational metrics. Despite this upgrade, the score remains low, signalling that significant risks and uncertainties persist. The company’s market capitalisation grade is rated 3, indicating a mid-tier valuation relative to peers in the heavy electrical equipment sector.

Industry Context and Sectoral Challenges

The heavy electrical equipment sector has been grappling with subdued demand growth and margin pressures due to rising input costs and competitive intensity. Bajel Projects’ flat to positive financial trend contrasts with the broader sector’s mixed performance, where many players continue to report margin contractions. The company’s ability to improve operating profit margins and interest coverage ratios is a positive sign, but the persistent net losses and declining sales highlight the need for sustained operational improvements and revenue growth.

Outlook and Investor Considerations

Investors should weigh Bajel Projects’ improving operational efficiency and return metrics against the ongoing challenges of revenue contraction and net losses. The company’s reliance on non-operating income to support profitability is a cautionary factor, suggesting that core business recovery remains incomplete. The stock’s recent underperformance relative to the Sensex and sector peers further underscores the risks involved.

Given the current financial profile and market conditions, Bajel Projects may appeal to investors with a higher risk tolerance seeking turnaround opportunities in the heavy electrical equipment space. However, cautious monitoring of quarterly results and margin trends is advisable before committing to a long-term position.

Historical Performance Comparison

Over the past decade, Bajel Projects’ stock has lagged significantly behind the broader market. While the Sensex has delivered a cumulative return of 239.52% over 10 years and 64.75% over five years, Bajel’s stock returns for these periods are not available, indicating limited or negligible gains. The three-year Sensex return of 38.13% further highlights the company’s underperformance relative to the benchmark.

Shorter-term returns also paint a challenging picture. The stock has declined 27.26% over the last year, in stark contrast to the Sensex’s 7.07% gain. Even in the one-week period ending 6 February 2026, Bajel outperformed the Sensex with a 5.2% gain versus 1.59%, but this appears to be a short-lived recovery amid broader weakness.

Conclusion: A Tentative Turnaround Amid Lingering Risks

Bajel Projects Ltd’s latest quarterly results reveal a company at a crossroads. The improvement in key operational metrics such as ROCE, operating profit margins, and interest coverage ratios suggests that management’s efforts to stabilise the business are bearing fruit. However, the persistent net losses, declining sales, and heavy reliance on non-operating income temper enthusiasm.

For investors, the company’s upgraded Mojo Grade from Strong Sell to Sell reflects this nuanced outlook. While the financial trend has shifted from flat to positive, Bajel Projects remains a high-risk proposition in a challenging sector. Continued focus on revenue growth, margin expansion, and sustainable profitability will be critical to justify a more optimistic investment stance.

Market participants should monitor upcoming quarterly results closely to assess whether the company can sustain its operational improvements and translate them into consistent bottom-line gains.

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