Q1FY22 Result Analysis:
1) Q1FY22 Result
- Bajaj Consumer Care has reported a muted growth in its revenue of 10.6% YoY from Rs. 197 Cr. in Q1FY21 to Rs. 217 Cr. in Q1FY22. While sequentially, the revenue of the company has fallen by around 12.8% from Rs. 249 Cr. in Q4FY21.
- The Earnings before Interest, Tax, Depreciation, and Amortisation (EBITDA) of the company has also gone down to Rs. 52 Cr. in Q1FY22 from Rs. 57 Cr. in Q1FY21, down by 8% YoY. Quarter on Quarter, the figure has decreased by 15% from Rs. 62 Cr. in Q4FY21.
- The EBITDA margin of the company has also contracted by 490 bps YoY and 60 bps QoQ to 24.6% in Q1FY22.
- The Profit Before Tax (PBT) of the company has decreased by 9.8% YoY from Rs. 66 Cr. in Q1FY21 to Rs. 59 Cr. in Q1FY22. Sequentially, the PBT of the company has decreased by 10.4% from Rs. 66 Cr. in Q4FY21.
- The Net Profit of the Company is Rs. 49 Cr. in Q1FY22 against Rs. 54 Cr. in Q1FY21 amounting to de-growth of 9.8% YoY. The Net Profit of the company was Rs. 55 Cr. in Q4FY21, which is down by 10.6% QoQ.
- The Net Profit Margin of the company stood at 22.6% in Q1FY22 down by 480 bps YoY and up by 60 bps QoQ.
Bajaj Consumer- Q1FY22 Result
3) Brand Performance:
i) Bajaj Amla Aloe Vera Hair Oil:
All India (Value Market Share % within Amla Segment
- Market Share Progression on AAHO has been steady despite Lockdown in Key Geographies of Rajasthan, UP, and MP which impacted van sales in Rural Markets.
ii) Bajaj Pure Coconut Oil:
- Launched 100% Pure Coconut Oil, Highest Grade without any additives.
- Launched in the pack of 100ml, 175ml, and 500ml.
- Coconut Oil is an Rs. 4,800 Cr. category (MAT-May 2021) largely concentrated in the West, South, and East.
iii) Bajaj Almond Drops Hair Oil:
- Bajaj ADHO market share is up by 110 bps.
- Share increase has been driven by consistent investment in both brand building and Distribution across both Urban and Rural Markets.
4) Business Highlights:
i) Q1FY22 Highlights:
- Sales were impacted in April and May due to Covid-19 related lockdown.
- Gross Margin was at 58.7% impacted due to commodity price inflation and change in product mix.
- With effect from 31st August 2021, Chandresh Chhaya has resigned as Company Secretary and Compliance Officer of the company.
- Light Liquid Paraffin (LLP) and Refined Mustard Oil (RMO) continue to witness an upward trend.
ii) Domestic Business:
- Retail Initiative in focused markets yielded success resulting in over 40% growth in retail.
- Van Operations got back to pro lockdown levels and going into Q2, it will be further scaled up to beyond the Q4 levels of last year.
- Urban has shown signs of recovery clocking a good growth in Q1 with retail being a growth driver, large wholesale markets were the draggers due to closure during the lockdowns.
- Retail Activation in Urban Markets.
- Strong Brand Presence in the e-commerce platform.
iii) International Business:
- Progressive Upward trend in Sales during the Quarter in Nepal and Bangladesh.
- Gulf Cooperation Council (GCC) reported lower sales due to travel restrictions.
- Robust growth of 102% across key geographies over low base last year.
Earnings Call Highlights:
- April and May month of 2021 was badly impacted due to lockdowns in concern with the second wave of Covid-19 in the country. With an easing down of restrictions, June saw a good recovery trend for the company. Also, June 2021 was the highest sales month for the company.
- The Value growth of the business excluding Sanitisers was 20.4% in the June Quarter of the year 2021.
- Input prices continue to witness inflation.
- The company has taken a price increase of around 2.5% to settle off with the inflation.
- The company will take further action regarding the price action according to the commodity inflation trend.
- Rural Growth continues to witness strong growth momentum, while urban growth has improved sequentially.
- The Central Regions of the country like MP, CG, Rajasthan reported negative growth of the company and hence impacted the business too.
Bajaj Pure Coconut Oil:
- To expand the brand portfolio, the company has launched Bajaj Pure Coconut Oil. Launched in July in some selective states.
- The company eyes for gaining market share in the Coconut Oil Category in the market.
- Here, the company strategically eyes for the West and South Market.
- This will also mark the entry step of the company in the South Market Operations.
- The company believes that this brand will run majorly on the Brand Name of Bajaj.
- The company is offering differentiated pricing for this product as compared to peers in the category.
- The Company will wait for few quarters in respect of D2C Business.
- The Company is awaiting for preparation of a brand portfolio for the D2C business.
- Bajaj Almond Brand is the cash cow of the business.
- The company believes that this brand should be supported with some other side brands like Bajaj Amla, and now Bajaj Pure Coconut Oil.
- The newly launched Bajaj Pure Coconut Oil may burn the EBITDA Margin/Gross Margins of the company for a few coming periods. But the company is well aware of this and will try to keep the margin levels intact.
- The management of the company believes e-Commerce and International Business will be key performance drivers for the company in the future.
- The management is strategically planning for ramping up International Business.