Buy Bajaj Consumer Care; target of Rs 300: ICICI Securities

ICICI Securities's research report on Bajaj Consumer Care

Bajaj Consumer (BaCo) posted a muted Q1FY26 performance, with revenue up 7.4% YoY (+3.7% ex-Banjara’s acquisition) led by 4% value growth in Almond Drops Hair Oil (ADHO) and flat volumes. In our view, the renewed focus on ADHO to drive volume growth (in price-pointed packs) and step-up in A&P spends (ADHO media spends +46% YoY) should improve the volume and margin performance. Non-ADHO portfolio had a soft quarter due to product portfolio rationalisation, partially offset by 20%+ growth in Bajaj Coconut oil. Lower commodity prices and a better mix drove margin expansion, which is likely to continue. Project Aarohan Phase 2 rollout across key Hindi-speaking markets, strategic changes following the management transition, and the successful integration of Vishal Personal Care (Banjara’s) remain key execution levers in the near term. Maintain BUY.

Outlook

We maintain our earnings estimates; modelling revenue / EBITDA / PAT CAGR of 8% / 17% / 17% over FY25-27E, respectively. Maintain BUY with a DCF-based target price of INR 300. At our target price, the stock will trade at 24x P/E Mar’27E. Downside risks: Over reliance on a single brand – ADHO and higher-than-expect commodity inflation and failure of new product launches.