Bajaj Consumer Q4 Results: Profit Beats Estimates On Steady Volume Growth

Bajaj Consumer Care Ltd.'s fourth quarter profit rose, beating estimates, on the back of steady volumes.

Net profit of the maker of Almond Drops hair oil rose 13% to Rs 40.46 crore in the quarter ended March, in comparison with the same period in the previous fiscal, according to an exchange filing. That compares with the Rs 36.5 crore consensus estimate of analysts tracked by Bloomberg.

Bajaj Consumer Q4 FY23 Highlights (Consolidated, YoY)

• Revenue grew 14% at Rs 249.42 crore—against the Rs 233.26 crore forecast.

• Ebitda rose 20% to Rs 41.7 crore, as compared with analysts' estimates of Rs 35.72 crore.

• Margin expanded to 16.7% against 15.9%.

• Expenses rose 13.7% to Rs 210.32 crore on lower ad spends.

• 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.

The hair oil industry has been gradually improving but the rural demand remains stressed.

Citing Nielsen data, the company said that the urban value growth of the industry stood at 3.7% while volume growth was at 4.1% in Q4, after months of remaining in the negative territory. The dip in value growth compared to volumes implies that mass products have performed better than premium due to inflation, according to the company. Rural, meanwhile, improved sequentially but is still down 6.2% volume-wise and 5.6% in terms of value.

For Bajaj Consumer, the Almonds Drops Hair Oil grew 11.4% year-on-year and 10.4% sequentially. Volume growth stood at 9.1% during the quarter.

Top line of new product development grew by 2.1 times to Rs 113 crore in FY23. Premiumisation of the Almonds Drops Hair Oil business remains a key pillar of growth for the company, it said in its investor's presentation.

It plans to extend the Almond Drops portfolio beyond hair oil through launch of products in hair care and skin care categories. The scaling up of coconut portfolio is also going as planned, the company said.

Among key inputs, the prices of refined mustard oil have corrected to Rs 125 per kg from as high as Rs 160 per kg a year ago, backed by good harvest crop and overall correction in global edible oil prices.

Light Liquid Paraffin prices have also corrected sequentially to Rs 81 per kg from Rs 87 per kg, on account of reduced input prices and overall benign demand scenario, according to the company.

The Board recommended a final dividend aggregating to Rs 5 per share having a face value of Re 1 each for the fiscal ended March 2023.

Shares of Bajaj Consumer closed 0.83% higher on the BSE before the results were announced, as compared with a 0.32% decline in the benchmark Nifty 50.