Buy Bajaj Consumer Care; target of Rs 280 Sharekhan

Sharekhan's research report on Bajaj Consumer Care

Bajaj Consumer Care Ltd‘s (BCC‘s) Q2FY2024 performance was weak with domestic volumes rising 4% as compared to ours as well as and street expectations of 7-9%. Revenues fell by low single digits in general trade. ADHO volume growth to recover to high single digit to low double digit in H2FY2024. BCC is focusing on double-digit revenues in the near term, largely led by volume growth. Raw material prices to remain benign and support margins. Pick-up in sales volume will boost OPM in H2FY24. BCCL eyes OPM of 18% in the near term.

Outlook

Stock has corrected by 16% from its high and trades at 19x/16x/14x its FY2024E/25E/26E EPS. We maintain a Buy on the stock with an unchanged PT of Rs. 280.

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