Bajaj Consumer Care Ltd. Result Analysis Q1 FY20-21

Bajaj Consumer Care Ltd. Result Analysis Q1 FY20-21

CMP:  182 (As on 17-07-2020 at 02:00 PM)

 

Total revenue from operations 197.5 Cr 

240.7 Cr (17.91%)  YoY | 178.7 Cr (6.17%)  QoQ 

 

Year ending revenue: 852 Cr Vs. 918 Cr (7.14%)

Net Profit of 54.2 Cr 

56.7 Cr (-4.42%) YoY 23.2 Cr (132.79%) QoQ 

 

Year ending Net profit: 185 Cr Vs. 222 Cr (16.67%)

EPS (in Rs.) 3.68

3.84 YoY |1.58 QoQ 

 

Year ending EPS: 12.52 Vs. 15.02

View: Strong result and exceptionally well. Despite Covid-19 outbreak YoY revenue declined and but profit slightly down. Significantly improved from QoQ performance for EBITDA, margin, net profit.    

Business Updates & Highlights:

Q4FY21 EBITDA was around INR 58.2 Cr Vs. 71.9 Cr in Q1FY21 Vs. 25 Cr in QoQ therefore declined by 19% in YoY and up by 57% in QoQ. EBITDA margin is around 30.4% Vs. 30.9% in YoY Vs. 14.85% in QoQ. 

Gross Margin in Q4FY21 is around 63.6%. Market share is around 10.2% in Hair oil segment which is consistent and increased by 10 bps in this quarter. 

Company business was not operating in first 15 days of April 2020. Next 15 days of April 80% operational, May 20 – 95% operational and June 20 – 100% operational. 

Launched new Products

Bajaj Nomarks Hand Sanitizer was launched in Q1FY21. Bajaj Multipurpose Sanitizer (5 Litre Pack) launched in June to cater to Institution requirements

Premium Hair Oil launched through E-commerce Platforms. Anti Greying Hair Oil with Natural Ingredients known for stopping greying

Financial

ROE and ROCE is around INR 47% and 58% respectively and book value per share is around INR 32 and share is currently trading at 5.7x of its book value. Company is currently trading at annualized PE of 13 which is very fair as per Industry benchmark. Promoter holding is around 38% in the company which is low but stable.  FIIs and mutual fund hold around 25.8% and 18.2% in the company which is decreased by around 2% by FIIs and 3% by mutual fund. The good thing is company has very small debt. 

Position: Share support price is INR 152. Share has bounced back in short term and long term investor may continue with the company with target price of INR 250.

Share View: Share price high 315 (52 week) and now 180. Bajaj Consumer Care Ltd. is one of the leading player in Hair oil category with brands like Bajaj Almond Drops Hair oil, Bajaj Brahmi Amla Hair Oil, Bajaj Amla Hair oil and Bajaj Jasmine Hair oil. Our flagship Brand Bajaj Almond Drops Hair oil is the No. 1* hair oil in Indian market with Premium positioning and commands one of the highest per unit price in the industry.

Opportunities: Valuation is very reasonable, very low debt. Strong hold by mutual fund and FIIs. Small equity base. Consistent market share for few quarter despite stiff competition from rival Godrej, Dabur etc. Bajaj Almond is still retain no. 1 position in Indian market for Hair oil segment. Launching of new products and sanitizer as per the current market and demand. Strong distribution network in all over country with more than 24 lacs retail outlets in country. 

Risk: Company has successfully managed and pick up growth in May and June 2020 despite Covid – 19 outbreaks but still Covid-19 factor cant be discounted and since every states follow strict guidelines and procedure next two quarter can be very challenging. 

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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