Hold Bajaj Corp; target of Rs 515: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss's reserach report on Bajaj CorpBajaj Corp is well placed in the high‐growth LHO market with strong brand Bajaj Almond Drops, which enjoys 60.9% value market share. The company’s strong brand equity, undisputed leadership in LHO market and sustained volume growth reinforce our belief in its potential. Deceleration in the hair oil industry has been a concern, especially with rural growth rates coming off; monsoon deficit at 14% raises some concern. We will closely monitor volumes and margin growth in Nomarks. Bajaj Almonds hair oil witnessed slowdown in volumes growth logging 6.3% YoY surge versus 10.6% YoY in Q1FY16, 23.9% YoY in Q4FY15, ~19% YoY in Q3FY15, ~4% YoY in Q2FY15 and YoY decline of 1% and 8.9% in Q1FY15 and Q4FY14, respectively. Recent correction in LLP bodes well for FY16 margin. KPCO, however, continues to disappoint. We maintain target multiple of 28x to arrive at a target price of INR515. We maintain ‘HOLD’ and rate the stock ‘Sector Performer’ on relative returns basis.Bajaj Corp (Bajaj) is part of the Shishir Bajaj Group of companies, one of India’s leading producers of hair oil. Currently, it is the third largest producer of hair oils and is the leader in the light hair oil category with a volume market share of ~59%. The company, with its flagship brand Bajaj Almond Hair Oil, is the leader in the light hair oil category and because of its premium positioning commands one of the highest per unit prices in the industry. The company’s reliance on this single product is high, which can be gauged from the fact that ~90% of the revenue comes from Bajaj Almond Drop which basically makes it a single brand company. Recently the company acquired NOMARKS and marked its entry into the anti marks category.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.

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