Bajaj Consumer Q4 Results Review: Shares Jump The Most In 13 Months; Nuvama Highlights Key Concern

Shares of Bajaj Consumer Care Ltd. rose the most in over 13 months after fourth-quarter profit beat analysts' estimates.

The softening of refined mustard oil and LLP prices will aid the company's margin, said Nuvaman Institutional Equities, which maintains a 'hold' on the stock.

The fourth-quarter net profit of the maker of Almond Drops hair oil rose 13% year-on-year to Rs 40.46 crore, compared with the Rs 36.5 crore consensus estimate of analysts tracked by Bloomberg.

Bajaj Consumer Care Q4 FY23 (Consolidated, YoY)

• Revenue is up 14.29% at Rs 249.42 crore (Bloomberg estimate: Rs 233.26 crore).

• Ebitda is up 20.11% at Rs 41.69 crore (Bloomberg estimate: Rs 35.72 crore).

• Ebitda margin at 16.72% vs. 15.91% (Bloomberg estimate: 15.3%)

• Net profit is up 12.95% at Rs 40.46 crore (Bloomberg estimate: Rs 36.50 crore).

• The company announced a final dividend of Rs 5 per share for the financial year 2022–23.

Other Highlights:

• Expenses rose 13.7% to Rs 210.32 crore.

• Advertising and promotion spend stood at 17.2% of sales in Q4, compared to 19% a year ago.

• Volume growth came in at 9.9% in Q4.

• E-commerce now contributes 7% of total sales.

• Maintains a 'hold' rating with a 12-month price target of Rs 165 apiece.

• Bajaj Almond Drops Hair Oil delivered 11.4% topline growth in the quarter, led by a volume growth of 9.1% and a sequential growth of 10.4%. The growth in ADHO was powered by small and large packs.

• Modern trade and e-commerce witnessed robust double-digit growth. International business grew by more than 151% in Q4.

• Expects the softening of refined mustard oil and LLP prices to aid the company’s margin profile.

• Intense competition from larger players remains a key concern, as per the brokerage.

• Company’s increased investment in visibility and better on-ground execution resulted in market share gains on alternate channels, the brokerage said.

Shares of Bajaj Consumer Care rose 8.66% to Rs 178.85 apiece as of 9:48 a.m., compared with a 0.12% advance in the benchmark, NSE Nifty 50 Index. The stock rose as much as 10.42% intraday, the most in over 13 months since March 31, 2022.

The total traded volume so far in the day stood at 68.8 times its 30-day average. The relative strength index was at 81, implying that the stock may be overbought.

Out of the 11 analysts tracking the company, five maintain a 'buy' rating, three recommend a 'hold,' and three suggest a 'sell' on the stock, according to Bloomberg data. The average 12-month consensus price target implies a potential downside of 6.5%.