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ICICI Securities Report
Bajaj Consumer Care Ltd. had another disappointing print with 9% YoY revenue decline (~7% YoY volume decline) due to onetime wholesale channel inventory correction. Positively, diversification journey continues with 17% YoY growth in non-Almond Drops Hair Oil portfolio (~18% salience) led by continued scale-up of coconut hair oil (double-digit growth) and ADHO extensions (+72% YoY).
Plans to expand urban direct distribution and village reach by 40% and 10% augur well for revival of growth in ADHO portfolio, if executed well. Management expects mid-to-high single-digit revenue growth in FY25 and double-digit growth in medium term.
Operating margin was under pressure due to operating deleverage (expects it to be in the range of 16-18%). Bajaj Consumer has taken multiple initiatives to strengthen ADHO though results are yet to be seen.
Diversification of product portfolio are steps in the right direction. It is more of a “show me” story. Retain 'Buy'.
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