Sharekhan's research report on Bajaj Consumer Care
Bajaj Consumer Care Ltd’s (BCC’s) hair oil volume grew by 10.5% versus category’s volume growth of 2.8% in Q1FY2024. Category volume growth recovered to positive trajectory after eight consecutive quarters of a lull. As rural demand picks up gradually, hair oil volume growth will improve in the quarters ahead. BCC’s hair oil volume growth would beat category growth close to double-digit in the coming quarters. Product launches (15% of domestic revenues) will continue to scale-up with distribution expansion and market share gains. OPM will consistently improve with benign input prices and better operating efficiencies in the coming years.
Outlook
Despite strong run up post our upgrade (on 4th May, 2023), stock trades at an attractive valuation of 19x/16x its FY2024E/25E earnings. We maintain our Buy recommendation on the stock with a revised PT of Rs. 280.
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