All levers in place for an electrifying growth
Bajel Projects (BAJEL) is a pure play power T&D EPC player with over two decades of strong execution experience in HV (132 kV and 220 kV) and EHV (765 kV AC & +/-800 kV DC) power transmission and distribution projects across India and overseas. With a revamped management team post- demerger from Bajaj Electricals, BAJEL is well positioned to capitalize on the surge in power T&D capex. To build a sustainable and profitable growth trajectory, BAJEL is prioritizing large, high-margin orders and executing targeted cost-control initiatives to drive meaningful margin expansion. Anchored by its flagship RAASTA 2030 strategy, the company has clearly identified high-impact growth levers to scale up as a prominent player in India’s power T&D EPC space. BAJEL’s order book as on 1HFY26 stood at INR33.8bn, while the company is well placed to secure additional orders worth INR 10bn in 2HFY26. We believe the company has the potential to deliver healthy revenue/ EBITDA/ profit CAGR of 22%/ 72%/ 124%, respectively over FY25-28E. We initiate coverage on the stock with BUY rating backed by its strong turnaround potential as an independent entity with a clear, growth-oriented strategic roadmap. We value the stock at 18x FY28E EPS to arrive at a TP of INR 270.
Strategic demerger aimed at enabling seamless operations and unlocking long term value
The demerger of Bajaj Electricals’ power EPC business into Bajel Projects Ltd. has created a focused, pure-play power transmission and distribution EPC platform with a clear strategic intent. As a standalone listed entity, BAJEL benefits from sharp management focus, independent capital access, and dedicated resource allocation to its core power infrastructure business. This structural reset enhances execution discipline, strengthens market positioning, and provides a strong foundation for scalable growth and margin improvement over the medium term.
Turning around from legacy headwinds to sustainable recovery; key initiatives in place
Having navigated challenges during FY20-24 in the aftermath of Covid-19, BAJEL dealt with execution related issues (change in scope and RoW challenges), low-margin legacy orders, commodity volatility, and stretched working capital (delayed payments) to emerge successful. The strategic reset is on the lines of: (1) Order mix shift towards higher-margin private and overseas projects, (2) securing large-ticket sized orders with superior EBITDA profile (~9%- 10%), (3) cost saving initiatives under Project Neev and (4) effective hedging mechanism and financing optimization, setting up BAJEL for a strong uptick. With improving execution discipline, stronger order inflows, and international scale-up, BAJEL is well placed for a profitability-led growth trajectory.
RAASTA 2030-Strategic road map enables BAJEL to usher in the next phase of growth
Under its flagship program ‘RAASTA 2030’, the company has embarked on a transformational growth journey with key focus on (1) Prioritizing high-voltage projects, (2) undertaking complex projects to enhance capabilities, (3) foraying into adjacent categories to enhance offerings, (4) margin-led efficiency improvement, (5) selective overseas scale-up, and (6) faster digital adoption.
Investment Summary
Backed by favorable power T&D capex tailwinds, sustained anticipated growth in order inflows and backlog, revamped management focus on execution discipline and cost control initiatives, BAJEL is on the cusp of a healthy growth trajectory. We expect topline CAGR of 22% over FY25-28E, while 350 bps strong EBITDA margin expansion will likely result in 124% CAGR in profitability over the same period. We initiate coverage on BAJEL with BUY rating and assign a TP of INR 270, based on 18x FY28E EPS.
