ICICI Securities has reiterated a BUY call on Bajaj Consumer Care, underscoring a compelling earnings recovery story backed by strong execution, improving margins, and sustained volume momentum. The brokerage has revised its target price to Rs 600, implying an upside of nearly 28% from the current market price of Rs 470. Bajaj Consumer Care has delivered a standout performance in Q4FY26, surpassing expectations on both revenue growth and profitability. The company’s robust execution strategy is translating into tangible earnings expansion, supported by strong traction in its flagship ADHO portfolio and improving rural demand. Margin expansion, aided by favorable product mix and cost efficiencies, has further strengthened the earnings profile. While near-term risks from raw material volatility persist, the company’s structural growth drivers and improved channel mix position it strongly for sustained performance. With execution-led growth firmly in place, ICICI Securities maintains high conviction in the stock.

Revenue Acceleration Driven by Volume-Led Growth

Revenue growth surged 30.4% YoY in Q4FY26 to Rs 3.3 billion, marking one of the strongest quarterly performances in recent years. This growth was primarily fueled by ADHO (Almond Drops Hair Oil), which delivered nearly double-digit volume expansion after adjusting for ml-age reduction.

The company’s Low Unit Packs (LUPs) strategy gained traction, registering growth in the high twenties, while core packs continued to maintain steady momentum. Importantly, rural demand recovery and improved distribution channels played a pivotal role in driving volume growth.

Organised trade, contributing ~30% of the revenue mix, grew in the twenties, supported by strong performance in modern trade, e-commerce, and quick commerce platforms. Meanwhile, general trade witnessed a healthy recovery, particularly in rural markets.

Margin Expansion Signals Structural Improvement

The quarter witnessed a remarkable expansion in profitability metrics:

Gross margin expanded by 899 basis points YoY to 63.7%
EBITDA surged ~140% YoY to Rs 765 million
EBITDA margin jumped to 23.4%

This margin expansion was driven by favorable product mix, ml-age optimization, and operational efficiencies, even as the company continued to invest aggressively in branding and digital initiatives.

Despite elevated advertising and employee costs, the company demonstrated strong cost discipline, ensuring that operating leverage translated into higher profitability.

Profitability Gains Reinforce Earnings Visibility

Profit after tax (PAT) grew over 105% YoY to Rs 636 million in Q4FY26, reflecting the combined impact of revenue growth and margin expansion. On a full-year basis:

FY26 revenue increased ~21% YoY
EBITDA margin improved to 19% from 13.2% in FY25
PAT rose ~52% YoY

The company’s ability to convert topline growth into bottom-line expansion highlights a clear shift toward execution-driven earnings quality.

Channel Strategy and Product Mix: Key Growth Catalysts

Bajaj Consumer Care’s growth is increasingly being driven by a balanced channel strategy:

Strong traction in modern retail and digital platforms
Continued recovery in general trade channels
Expansion in rural markets, particularly through targeted distribution initiatives

Additionally, the non-ADHO portfolio, which generated Rs 2.3 billion in FY26 revenue, is expected to scale significantly, with management targeting Rs 5 billion in revenue over the next three years.

Aarohan Initiative: From Expansion to Productivity

The company’s flagship Aarohan distribution program has largely completed its expansion phase and is now transitioning toward productivity enhancement.

Markets under Aarohan have shown ~4% higher growth compared to non-Aarohan regions, indicating the success of this initiative.

The focus going forward will be on:

Improving throughput in existing markets
Enhancing general trade productivity
Scaling core and emerging product categories

Valuation Framework and Growth Outlook

ICICI Securities projects a robust growth trajectory over FY26–FY28:

Revenue CAGR: 12%
EBITDA CAGR: 19%
PAT CAGR: 18%

At the revised target price of Rs 600, the stock is expected to trade at approximately 32x FY28E earnings, reflecting confidence in its sustainable growth profile.

Technical Perspective and Price Action

The stock has delivered a strong rally over the past 12 months, significantly outperforming the broader market, with returns exceeding 170%.

Key Levels for Investors:

Immediate Support: Rs 430 – Rs 445
Strong Support Zone: Rs 380 – Rs 400
Near-Term Resistance: Rs 500
Target Zone: Rs 600

The price trend remains firmly bullish, supported by improving fundamentals and sustained institutional interest.

Risks to Monitor

While the outlook remains positive, investors should remain mindful of key risks:

High dependence on a single brand (ADHO)
Volatility in raw material prices
Execution risks in scaling new product segments
International business weakness, particularly in GCC markets

Additionally, geopolitical uncertainties impacting input costs could pose short-term challenges to margin sustainability.

Investment Verdict: Strong Execution Underpins Upside Potential

Bajaj Consumer Care stands at an inflection point where execution excellence is translating into consistent earnings growth. With distribution expansion largely complete and focus shifting toward productivity and portfolio scaling, the company is well-positioned to sustain its growth momentum.

The BUY recommendation with a target of Rs 600 reflects confidence in the company’s ability to deliver superior returns through a combination of volume growth, margin expansion, and disciplined capital allocation.