Bajaj Consumer Care Limited
Q1 FY26
Call date · August 12, 2025

1 · Management Commentary

Key Positives

  • Stand-alone sales grew 3.2% YoY to INR 244.5 crores; consolidated sales up 7.4% YoY to INR 259.5 crores.
  • Gross margin improved 140 bps YoY and 240 bps QoQ to 56.6% (stand-alone).
  • EBITDA grew 11.6% YoY to INR 42.8 crores (margin 17.5%); consolidated EBITDA margin up 30 bps YoY.
  • PAT at INR 39 crores (stand-alone, margin 16%) and INR 37.9 crores (consolidated, margin 14.6%).
  • Almond Drop Hair Oil (ADHO) returned to growth, with broad-based gains including small packs and sachets.
  • Organized trade channel grew double-digit YoY; now ~29% of sales, with modern trade and e-commerce both growing in their 20s.
  • Over 25,000 new outlets added via Project Aarohan.

Key Negatives

  • International business revenue declined 20% YoY due to tariff uncertainty and market slowdown, especially in MEA and GCC distributor markets.
  • Rural general trade channel sluggish due to internal distribution changes, causing temporary disruption.
  • CSD and CPC channels saw muted performance due to stock rationalization.

Forward Guidance

  • No significant Capex planned; current plants have 2–3 years of capacity headroom.
  • Continued focus on reviving double-digit growth, especially for ADHO.
  • Project Aarohan to expand and optimize distribution network further.
  • Integration of Vishal Personal Care (VPCL) underway; expected to drive growth in natural/herbal segment and strengthen South India presence.
  • Ongoing efforts to improve operating margins through calibrated pricing, mix improvement, and cost optimization.
  • Portfolio diversification to be pursued thoughtfully, with focus on sustainable, profitable growth.

2 · Q&A Highlights

Q 1 (Composite): Why is rural general trade sluggish, and how does this compare to broader FMCG trends?
A (Management):
• Rural sluggishness is due to internal distribution changes under Project Aarohan, not macro factors; disruption is temporary and expected to normalize in coming quarters.

Q 2 (Composite): What is the company’s portfolio focus—core brands vs. new segments?
A (Management):
• ADHO remains the core focus with increased A&P investment; coconut oil growth is below market leader due to prioritizing profitable, sustainable revenues; portfolio diversification will be pursued selectively.

Q 3 (Composite): What are the drivers and sustainability of recent gross margin improvement?
A (Management):
• Margin gains driven by improved mix, selective pricing, and reduced trade spends; further benefits expected as initiatives are not fully in base yet.

Q 4 (Composite): How will the company balance margin improvement and volume growth, and what is the target margin profile?
A (Management):
• Aim is balanced, sustainable, profitable growth—improving both margins and revenues; target is to reach sectoral average EBITDA margins (low to mid-20s), moving up from current levels.

Q 5 (Composite): What is the integration plan and synergy outlook for Vishal Personal Care (VPCL) and Banjara’s?
A (Management):
• VPCL Q1 revenue INR 15.5 crores (~10% YoY growth); integration is phased, with pilot markets underway; full distribution integration expected over 4–6 quarters; synergy focus on expanding natural/herbal portfolio and South India distribution.

Q 6 (Composite): What is the capital allocation approach for innovation and new products, and how is NPD visibility being addressed?
A (Management):
• Capital allocation guided by EBITDA and growth guardrails; innovation center established; new products will be launched selectively in chosen channels/markets, scaling up only after initial traction.

Q 7 (Composite): How is the company addressing international business headwinds and are new export markets being targeted?
A (Management):
• Tariff and export headwinds (notably to the US) are being monitored; issue is not material to overall revenue; alternative mechanisms under consideration if needed.

Q 8 (Composite): What are the plans for Capex and plant utilization?
A (Management):
• No significant Capex planned; current plants (Dehradun, Guwahati, Paonta) have sufficient capacity; some third-party manufacturing continues for smaller products.

3 · Other Key Numbers

  • Stand-alone sales: INR 244.5 crores (3.2% YoY growth)
  • Consolidated sales: INR 259.5 crores (7.4% YoY growth)
  • Gross margin (stand-alone): 56.6% (up 140 bps YoY, 240 bps QoQ)
  • EBITDA (stand-alone): INR 42.8 crores (margin 17.5%, up 11.6% YoY)
  • EBITDA margin (consolidated): up 30 bps YoY; like-to-like improvement 100 bps
  • Stand-alone PAT: INR 39 crores (margin 16%)
  • Consolidated PAT: INR 37.9 crores (margin 14.6%)
  • Organized trade saliency: ~29% of sales
  • Over 25,000 new outlets added via Project Aarohan
  • International business revenue: down 20% YoY
  • VPCL Q1 revenue: INR 15.5 crores (~10% YoY growth), EBITDA margin “low teens” (before one-offs)
  • Advertising: Over 3,000 GRP TV campaign for ADHO; digital campaign reached over 4 crore consumers
  • Input cost: 25% inflation in RMO, copra prices nearly doubled; LLP prices stable
  • No significant Capex planned; plants have 2–3 years headroom
  • Number of plants: Dehradun, Guwahati, Paonta (owned); one large and several small third-party facilities
  • Employee count: Not disclosed

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