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.
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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.
Nuvama On Bajaj Consumer Care
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%.
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