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Last Updated : Jul 17, 2019 01:22 PM IST | Source: Moneycontrol.com

Accumulate Bajaj Consumer Care; target of Rs 359: Dolat Capital

Dolat Capital recommended accumulate rating on Bajaj Consumer Care with a target price of Rs 359 in its research report dated July 16, 2019.

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Dolat Capital's research report on Bajaj Consumer Care


The company’s topline rose 8.5% in Q1FY20, driven by a 4.6% volume growth. The volume performance was impacted due to stress in the CSD channel. Excluding CSD volume, the domestic business’s volume rose 3.5%. The strong volume growth in modern trade (+13%) and multifold growth in IB sales helped it mitigate the negative impact of CSD decline. The company was able to expand GM by taking price hikes in the quarter. However, operating margin shrunk, due to a rise in A&P spends. The ADHO brand continued to gain volume and value market share. Going ahead, we believe that the rural areas should benefit from stimulus.


Outlook


However, new product launches may lead to a further rise in A&P spend. We maintain our FY20E and FY21E EPS at ` 16.5 and ` 17.9, respectively, as Q1FY20 results were in line with our estimate. We value the stock at 20x FY21E to arrive at a TP of ` 359. Maintain Accumulate.


For all recommendations report, click here


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First Published on Jul 17, 2019 01:22 pm
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