Bajaj Consumer share price: Sharekhan has maintained a Buy Rating with a revised price target of Rs 355. Sharekhan says Bajaj Consumer Care posted strong performance in Q4FY2021 due to 40% growth in revenue to Rs 246 cr (inline with Sharekhan’s expectation and street expectation, which was Rs 244 crore) and 120% growth in PAT to Rs 53.9 cr (inline with street expectation of Rs 53.7 cr and better than Sharekhan’s expectation of Rs. 43.3 cr). Bajaj Consumer Care Revenue stood flat on a qoq basis, and there was no major impact of surge in cases on the distribution and supply front at the fag end of the quarter. Bajaj Consumer share price closed at Rs 294.4, down Rs 17.75 or 5.7% in yesterday’s session. Bajaj Consumer care share price has moved from Rs 274 to Rs 294.4 in the last 1 week.

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Sharekhan says that Rural India maintained its strong growth momentum with 61% growth, while urban has shown recovery with 23% growth in Q4 FY2021. Bajaj Consumer Care said that Almond Drop Hair Oil (ADHO) continued to do well across geographies. New variant of amla, Bajaj Amla Aloe Vera has been relaunched across key markets. The company has 2.5% market share in the amla hair oil category and the focus is on improving the market share through distribution expansion and promotions (currently available in 3.88 lakh outlets). This led to a 700 bps decline in the gross margin during the quarter. To mitigate the impact of inflation, the company has undertaken price increases in February 2021 and March 2021, highlights Sharekhan.

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Sharekhan says Bajaj Consumer Care ended the fiscal on a good note with revenue growing by 8.3% yoy to Rs 915 cr. Operating Margins improved by 170 bps to 26.6% and PAT grew by 17.3% yoy to Rs. 223.6 cr. Volume growth for FY2021 stood at 15%, largely driven by strong growth in amla hair oil and strong growth in sanitisers. The month of April has been good for the company, with the rural market continuing to perform well.

Sharekhan says that Bajaj Consumer Care has maintained its focus on maintaining adequate stock at factory level and distributors level so that its products will continue to be available on retail shelves. Though April was a good month, management is little cautious about the coming months, considering the rise in cases and state governments opting for localised lockdowns, which might have some disruption on sales. However, medium-term aspiration is on achieving double-digit revenue growth with strategies in place. Gross margin will be lower compared to historical levels,as revenue mix will change with new product launches and increasing amla hair oil share, which has lower gross margins compared to ADHO brand. However, focus remains on achieving Operating margins above 25% and see consistent improvement in the same over the medium terms through higher sales volume and cost efficiencies.