INTRODUCTION

In today's business environment, working capital management is

critical. Working capital management is concerned with a company's

present assets and liabilities. Working capital management that is

effective improves a company's liquidity and expands its growth

opportunities. Working capital management that is effective increases

a company's profitability and market value. It is also critical in

decreasing the danger of bankruptcy; without excellent liquidity

management, even companies with promising long-term prospects and

healthy bottom lines will fail. Liquidity issues plague many businesses

for a variety of reasons. This is especially true for small businesses.

Small businesses must keep a close eye on and manage their present

assets and obligations. This is because, in comparison to large

enterprises, they have a higher proportion of funds invested in current

assets. Small businesses have less liquidity and more erratic cash

flows, and they rely on their customers more. Larger companies, on the

other hand, have more access to both short and long-term financing,

have less capital locked up in current assets, and can borrow to satisfy

their liquidity needs. If a small business's liquidity position is not well

managed, its current assets may not be enough to cover its current

liabilities.Therefore, the small firm should search for external

financing which is usually unavailable or expensive.

IMPORTANCE OF WCM

Working capital management is a key part of achieving long-term

success. When a business runs out of cash to cover its day-to-day

expenses, it will eventually stop producing goods and services. In such

cases, the company will be unable to serve its existing clients and, as a

result, will be unable to attract new ones. The company will then use

corporate capital to restart production. While this approach may

provide a temporary reprieve, it will jeopardise asset and equipment

purchase and maintenance, putting long-term stability at risk. Since a

result, having a working capital management system in place is critical,

as it allows managers and business owners to realistically analyse the

company's working capital requirements, allowing them enough time to

find a solution. Working capital management also aids firms in

streamlining procedures, lowering overhead costs, and preventing theft

and fraud.

COMPANY OVERVIEW

Bajaj Electricals Limited (Bajaj Electricals) is a worldwide recognised

and trusted brand that operates in the Consumer Product (Appliances,

Fans, and Lighting) and EPC areas (Illumination, Power Transmission and

Power Distribution). In addition to being one of India's biggest

enterprises, the company operates in more than 40 countries across

Southeast Asia, the SAARC nations, the Middle East, and Africa.

Morphy Richards goods are also marketed and serviced by Bajaj

Electricals in India and the SAARC region, providing clients with a

premium choice of home and kitchen appliances that meet international

quality standards.

Bajaj Electricals Ltd. was incorporated in the year 1938. Its today's

share price is 1048.2. Its current market capitalisation stands at Rs

12016.15 Cr. In the latest quarter, the company has reported Gross

Sales of Rs. 49770.86 Cr and Total Income of Rs.50294.4 Cr. The

company's management includes Ajay Nagle, Shailesh Haribhakti, Rajiv

Bajaj, Rajendra Prasad Singh, Pooja Bajaj, Munish Khetrapal, Madhur

Bajaj, Indu Shahani, Harsh Vardhan Goenka, Anuj Poddar, Shekhar

Bajaj, Shekhar Bajaj.

It is listed on the BSE with a BSE Code of 500031 , NSE with an NSE

Symbol of BAJAJELEC and ISIN of INE193E01025. It's Registered

office is at 45 - 47,Veer Nariman Road, Mumbai-400001, Maharashtra.

Their Registrars are ACC Ltd. It's auditors are Dalal & Shah, Dalal &

Shah LLP, SRBC & Co LLP

TRADE SALES

Bajaj Electricals' trade sales channel comprises a core network of

distributors and a secondary network of retailers that ensure that the

company's products are available in the market. Around 70% of overall

revenue from consumer products was generated through trade sales. A

core network of distributors and a secondary network of retailers

make up Bajaj Electricals' trade sales channel, which ensures that the

company's products are available in the market. Trade sales accounted

for approximately 70% of total revenue from consumer products. To

boost distributor involvement, the Company uses a replenishment

approach that not only ensures continuous supply but also provides

distributors with greater working capital. Furthermore, in order to

optimise its presence across the country and other regions, the

Company conducts a complete market mapping across the country and

other geographies. To guarantee that each outlet receives more

attention, the Company has lowered per capita outlet coverage for each

salesperson. This has not only improved interactions with each shop,

but it has also aided in the growth of each outlet's business. A

nationwide effort was launched to improve store consistency in order

to facilitate range billing. The following were some of the year's major

highlights:
• The Fan segment saw growth in sales value at double the speed of the

industry, for sub economy ceiling fans. The revamped distribution

model has enabled the Company to achieve significant value on a

sustained yearly basis.

• The Company revamped its portfolio in the premium segment and

introduced value-added products in the economy range. Both strategies

were aimed at increasing the volume of sales and it worked well for the

Company.

• In the Water Heater segment, the Company consolidated its market

position. Despite the aggressive pricing route taken by competitors,

Bajaj Electricals’ position remained unchallenged.

• Despite price erosion of the LED product range, the B2C business saw

a significant value growth of 9% in the lighting segment while industry

and all other key competitors registered a de-growth in value.

Supply chain management is characterised by Bajaj Electricals as a

replenishment-based system for Made to Stock products and a Made

to Order system for products that are not sold on a regular basis. The

replenishment approach allows the business to better manage its

inventory.Supply chain management is an important aspect of Bajaj

Electricals' operations since it has a direct impact on product

availability and, as a result, sales and working capital held in inventory.

The following are some of the strategies used to improve the overall

efficiency of the supply chain:

• Automated capturing of real-time demand, in the form of secondary

sales from distributors and converting it to demand for Bajaj Vendors

on a daily basis.

• Monthly Sales and Operations meetings to fine tune rolling plans for

the next 3-4 months.

• Frequent changes of desired stock levels in response to increase /

decrease of demand; and seasonal changes in demand.

• Monthly meetings to plan actions for slow moving inventory;stock level

changes; and inter branch / warehouse movement.

These strategies have enabled the Company to ensure availability of

products and order fulfillment with minimal inventory.

Unsecured, considered good, consists of loans given to Nirlep

Appliances Pvt Limited (Subsidiary of the Company) and Hind Lamps

Limited (Associate of the Company), for meeting its working capital

requirements. Unsecured, credit impaired loan is given to Starlite

Lighting Limited (Joint Venture of the Company), for meeting its

working capital requirements.

To support their working capital needs, the Company has provided loans

and advances to its affiliate companies (Nirlep Appliances Pvt Ltd,

Starlite Lighting Limited, and Hind Lamps Limited). In addition, the

Company has undertaken strategic investments in several organisations

(equity and preference interests). The Company's Board of Directors

has given its approval to all such loans, advances, and investments, as

well as their terms and conditions. These companies additionally serve

as a reliable source of product for the company. On a regular basis, the

recoverability of these loans, advances, and investments is assessed

based on their business plan, future profitability, cash flow estimates,

asset market value, and other factors.

RISK MITIGATION

The Company maintains proper connection with clients in order to

identify additional work at specific projects and to ensure proper

inventory use at specific locations. In addition, clients' needs at other

locations are detected, and unused inventory is moved to locations

where it is needed.This allows the company to ensure optimum

inventory use. It also works with clients to recover receivables by

ensuring that sites are handed over and projects are completed on

time. Client changes in scope of work in EPC projects, as well as

unresolved ROW issues, may result in the non-use of material acquired

for a specific project. Furthermore, a delay in project completion may

cause a delay in customer receivables. This may have a negative impact

on the Company's working capital, and it may be unable to satisfy its

short-term obligations.

COVID-19 PANDEMIC

Coronavirus is a kind of virus that causes heart (COVID-19) The

pandemic COVID-19 has arrived in India and around the world, causing

the country's economy to slow dramatically. Governments all across the

world have been obliged to take unprecedented steps to protect

people's lives as a result of this huge health issue. The Government of

India first declared the statewide lockdown in India on March 24,

2020, in order to confront the COVID-19 threat. While the lockdown

and limits imposed on numerous activities as a result of the COVID-19

pandemic were vital to contain its spread, they also created

unprecedented obstacles to all businesses, including the Company's

business operations. COVID-19 has caused significant disruption to the

Company's activities. The supply chains have been stressed as a result

of the lockdown in many States/Union Territories across the country,

resulting in a loss of business and temporary pressure on cash

flows/liquidity/profitability/margins due to lower receivables

collection, operating expenses, payment obligations to vendors and

statutory authorities, and so on.