Hold Bajaj Corp; target of Rs 494: Edelweiss

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Edelweiss's research report on Bajaj CorpBajaj Corp’s Q3FY16 revenue came in line with our estimate, while PAT surpassed it led by higher-than-expected margin. Key positives were: (i) multi-year high gross margin at 65.9% (up 333bps YoY) led by softer commodity prices; and (ii) 22 quarter high EBITDA margin at 31.8% (expanded 307bps YoY). Key negatives were: (i) mere 1% YoY volume growth (6.3% YoY in Q2FY16, 19% YoY in Q3FY15) in Almond Drop Hair Oil (ADHO) impacted by high base, rural slowdown, Nepal issue and destocking in CSD channel; (ii) sudden 13.7% YoY decline in volumes of Brahmi Amla Hair Oil (BAHO) post good run (54.9% YoY growth in H1FY16); (iii) 24.6% and 15.5% YoY fall in Nomarks’ sales and volumes, respectively, due to SKU rationalisation and change in positioning; and (iv) continued disappointment of Kailash Parbat with 51% Y Y volume dip. Success of new Nomarks strategy—from problem solving to personal care brand—remains key monitorable. Maintain ‘HOLD’.We like Bajaj Corp’s dominance in the LHO category with sustained market share gains. We will closely monitor Nomarks’ & KPCO’s performance and rural growth. At CMP, the stock is trading at P/E of 23.2x and 19.6x FY17E and FY18E, respectively. We maintain ‘HOLD/SP’ with target price of INR494 (earlier TP of INR 515).For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More