Hold Bajaj Consumer Care; target of Rs 178: Sharekhan

Sharekhan's research report on Bajaj Consumer Care

Bajaj Consumer Care Ltd (BCC) clocked weak numbers for Q3FY22 with flat revenues at Rs. 228.4 crore; OPM fell by 322 bps to 14.4%; while PAT declined by 16% y-o-y to Rs. 34 crore. Almond Drop Hair Oil (ADHO) registered mid-single digit value decline, Amla product posted mid-single digit growth. ADHO will take time to revive. New product launches grew by 2.7x in 9MFY23; contribution will go up to ~40% by FY25 from 13% currently. It will support overall revenue growth and profitability in long run.

Outlook

Stock trades at 19x/16x/15x its FY2023E/24E/25E earnings. We downgrade our rating to Hold with a revised PT of Rs. 178 as recovery in hair oil category will take time.

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Bajaj Consumer Care - 09 -03 - 2023 - khan