Bajaj Consumer Care Share Price Target at Rs 210: ICICI Securities
Bajaj Consumer Care has reported a mixed Q4FY25, with modest revenue growth and early signs of revival in its core Almond Drops Hair Oil (ADHO) segment. ICICI Securities has maintained a BUY call on the stock while trimming the target price from Rs 220 to Rs 210, reflecting concerns over sustained margin underperformance despite tactical growth interventions. Volume recovery, digital expansion, and the integration of Vishal Personal Care (Banjara’s) are pivotal for FY26 momentum. Valuations remain reasonable with BaCo trading at a forward P/E of 15.7x FY26E EPS.
Revenue Recovery Underway, Volume Push Still Fragile
BaCo posted YoY revenue growth in Q4FY25, driven by volume increase and tactical interventions in ADHO packs. Large 700ml variants grew significantly, small packs jumped QoQ, and the Rs 10 sachet segment expanded YoY. Non-ADHO portfolio—contributing a substantial share of total sales—delivered impressive YoY growth, led by coconut oil and product line extensions.
Almond Drops Core Segment Shows Sequential Revival
The flagship ADHO brand witnessed a notable QoQ volume uptick in Q4FY25, showing signs of a turnaround. This came on the back of promotional activity, selective pricing strategies, and expanded rural outreach. However, full-year volume growth remains modest, making sustained traction critical in FY26 to regain market leadership in the light hair oil category.
Strong Expansion in Modern Trade and Quick Commerce
Modern trade grew significantly YoY, with strong performances in DMart and Vishal Mega Mart. Quick commerce rose sharply YoY and now forms a major portion of e-commerce revenue. The GT channel improved sequentially, supported by growth in wholesale and broader distribution across Aarohan-focused states.
Project Aarohan Phase 2 Targets Deeper Rural Penetration
After a successful pilot in UP and MP, Project Aarohan was rolled out across Rajasthan, Delhi, Haryana, and Chhattisgarh. The initiative added thousands of new outlets, boosting secondary sales meaningfully. In Q4FY25, nearly all partners were billed, and a majority of satellite towns were effectively serviced. Execution in FY26 will be crucial for rural GT acceleration.
Integration of Vishal Personal Care Adds Southern Market Access
BaCo acquired a significant stake in Banjara’s and aims to acquire the remaining portion in Q1FY26. With a notable topline and a strong presence across five southern states, VPCL opens doors to a naturals-oriented personal care portfolio. Synergies from this integration are expected to enhance top-line momentum and optimize marketing expenditure by FY27.
Margin Recovery in Progress, Still Trails Guidance
Gross margin improved QoQ in Q4FY25 due to strategic price hikes to offset copra inflation. However, EBITDA margin improved only modestly and still trails the guided range. Cost pressures from increased A&P and operational spends weighed on profitability.
Financial Snapshot: Profitability Trends Remain Under Pressure
PAT declined YoY in Q4FY25, while FY25 EPS dropped significantly. FY26–27 earnings are expected to rebound on improved sales mix, better scale, and margin normalization.
| Metric | FY25 | FY26E | FY27E |
|---|---|---|---|
| Net Revenue (Rs mn) | 9,428 | 10,188 | 11,072 |
| EBITDA (Rs mn) | 1,324 | 1,556 | 1,773 |
| Net Profit (Rs mn) | 1,301 | 1,528 | 1,750 |
| EPS (Rs) | 9.1 | 10.7 | 12.3 |
| EBITDA Margin (%) | 14.0% | 15.3% | 16.0% |
Cash Position Strong; No Leverage on the Balance Sheet
BaCo remains debt-free with strong cash reserves as of FY25. Free cash flow for the year remained healthy despite elevated investment in working capital and brand integration. Dividend payout was generous, translating into a compelling yield.
Revised Valuation and Target Price
ICICI Securities cuts EPS estimates and revises the DCF-based target to Rs 210. At this level, BaCo trades at an attractive forward valuation, with upside potential contingent on margin normalization, rural thrust, and brand diversification efforts.
Key Risks to Watch
Overdependence on ADHO remains a strategic vulnerability. Other downside risks include sustained copra inflation, failure of new product launches, and slow integration of the Vishal Personal Care portfolio. Investor confidence hinges on sustained execution across multiple fronts.
Disclaimer: Investors are advised to perform their own due diligence before making investment decisions.
