Bajaj Consumer Q4 Results Review - Margins Yet To Revive; Reduce: Dolat Capital

Dolat Capital Report

Bajaj Consumer Care Ltd.’s Q4 FY24 revenue and Ebitda came below our estimates. GT on secondary basis declined in mid-single digits, while decline in rural demand moderated compared to last three quarters. Non-Almond Drops Hair Oil reported 24% value growth during the quarter.

Domestic business posted 4.6% de-growth with flat volume growth. E-com grew by 26/27% in Q4/FY24.

We believe advertising and promotion spends will remain high with new product launches. Thus, margins would continue to remain under pressure in the near term.

We have lowered our FY25/26E EPS estimates by 2.0/4.6% to Rs 11.8/12.4 to factor in Q4 performance and 16-18% margin guidance. Though we remain cautious on the premium hair oil category considering its discretionary nature and increased competitive intensity, new product development is likely to aid revenue growth.

Valuing the stock at 20 times FY26E earnings per share, we maintain target price of Rs 247. Downgrade to Reduce.

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