Bajaj Consumer Care Ltd. share price target

Domestic business performance improved; IB was laggard A top-line growth of 9.5% could be attributed to a satisfactory 8.7% volume growth (on case basis) but was restricted by poor IB performance. Despite 20% YoY increase in LLP prices, GM improved 150bps driven by better sales mix. EBITDA margins also expanded by 50bps as GM expansion and 150bps decline in other expense was partially offset by 140/100bps increase in employee cost/A&P; spends during the quarter. We believe that favourable volume base will enhance performance going ahead. Further improvement in wholesale and CSD channels...

Good quarter; volume trajectory now looking up Bajaj Corp reported a better than expected 1QFY19 earnings buoyed by a much stronger than expected acceleration in volume growth of its flagship Bajaj Almond Drops (BAD) to 11.2% - this is the highest seen in the last 13 quarters, albeit on an easy base (volumes fell 6.6% in 1Q last year due to GST-transition related downstocking by the trade). Domestic volume growth was even stronger at 13.9% and more importantly, retail-level offtakes, which are free of base and destocking-related issues, also grew 10.2% during the quarter. Management is, after quite a long time, sounding reasonably bullish about the business'...

Sluggish Recovery in Rural Volumes, Stable Domestic Volumes to Continue Further: Bajaj Corp has delivered steady revenue numbers during the quarter on the backof 5.9% growth in overall volumes, led by 7.3% (during Q4FY18) volume growth in Bajaj Almond Drops. The volume growth from rural areas has remained sluggish during the quarter.

nd establish itself as a full FMCG company. Increasing dependence on modern trade (more profitable than general trade) and initiatives to increase direct distribution would doubtlessly help the company to launch new products....

Healthy Domestic Volumes and Further Growth Expected on the Back of Rural Volumes: Bajaj Corp has delivered healthy revenue numbers during the quarter on the back of 5.2% growth in overall volumes, led by 8.3% growth in domestic hair oil brand volume. Volume growth from rural areas has remained weak due to the sluggish demand scenario.

A top-line growth of 5.9% could be attributed to a remarkable 8.2% volume growth in the domestic market but was restricted by a dip in CSD sales and in IB. Despite YoY increase in LLP prices, GM grew due to better sales mix. However, EBITDA margins dipped 10bps as a rise in GM was completely offset by 240/90/40bps increase in A&P;/employee/other expenses. We believe the volume base is very favorable which will enhance performance Q4FY18 onwards. Further, higher volume growth would present an opportunity to take price hikes in the near term. We have marginally tweaked...

Mixed Performance; Rural Recovery on the Cards Bajaj Corp has reported a mixed set of numbers for 3QFY18. Net sales grew by 5.9% YoY to Rs2bn (vs. our estimate of Rs2.1bn), while PAT fell by 4.6% YoY to Rs552mn (vs. our estimate of Rs608mn). However, EBITDA grew by 10.8% YoY to Rs678mn in line with our estimates. Lowerthan-estimated growth is attributable to sharp fall in international business revenues (down 44% YoY) and lower other income (down 67% YoY to Rs45mn). On the back of favourable base effect, domestic volume growth came in at 8.2%, which was the highest in past 9 quarters. Expecting the Company to report revenue and earnings CAGR of 11.9% and 12.5%, respectively through FY17-20E coupled with attractive valuation of 24x FY20E, we maintain...

Bajaj Corp's 3QFY18 report was disappointing as volume growth recovery turned out to be well-below our expectations. While the headline numbers were impacted by lower international turnover, domestic business volume growth of 8% was also quite subdued given a highly favourable base (BAD volumes declined 4%, overall volumes down 6.5% in 3Q LY). Reported operating performance for the quarter was partially aided by prior period income (CGST refund pertaining to earlier excise-exempt zones). Excluding this, EBITDA growth was just 2-3% due to the impact of sharp increase in SG&A; (+23.7%). The company attributed the disappointment in performance to weakness in the wholesale and CSD...

Bajaj Corp has reported an encouraging set of numbers in 2QFY18, especially on the volume front. Its overall volume grew by 5.1% YoY, while the flagship Almond Drops Hair Oil (ADHO) volume grew by 6.5% YoY, marking the highest growth in the past 8 quarters. While net sales grew by 3.7% YoY to Rs2bn, EBITDA and net profit declined by 13% YoY to Rs583mn and Rs507mn respectively, which can be attributed to higher A&P; and employee cost. Looking ahead, we expect the growth momentum to improve on the back of major recovery in rural demand post normal monsoon, stabilisation of trade post GST roll-out, increased focus on direct distribution and return of pricing power. Expecting 10.6% revenue and 11.2% earnings...