Bajaj Consumer Q2 Review - Longer-Than-Expected Turnaround; Weak Revenue With Weaker Margins: ICICI Securities
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ICICI Securities Report
Bajaj Consumer Care Ltd.'s Q2 revenue declined 2.1% YoY (hair oil) – (Q2) revenues have been in the range of Rs 2-2.2 billion for the last five years.
The more concerning part is that (near flattish) revenue run-rate is at less than 60% gross margins (versus 66-67% normalised level) – due to inflationary raw material and product mix.
Bajaj Consumer Care highlighted:
significant slowdown in rural,
weak wholesale and
good recovery in modern trade and increasing salience of e-commerce (4% of overall business).
While the building blocks of expanding in popular hair categories of Amla and coconut and developing a premium brand are steps in the right direction, there appear challenges in (overall) execution.
We like it's focus on investing in both brand building and distribution expansion.
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