Bajaj Consumer Care has received a reaffirmed BUY recommendation from ICICI Securities, which has increased its 12-month target price to Rs 760 from Rs 600, implying an upside potential of around 15% from the current market price of Rs 660. The brokerage believes the company's operational turnaround is gaining traction, supported by strong volume growth in its flagship Almond Drops hair oil, expanding profitability, and improving execution across newer product categories. While management remains cautious about raw material inflation and demand volatility, ICICI Securities believes sustained earnings growth, margin expansion and productivity initiatives position the company well for long-term value creation.

ICICI Securities Maintains BUY Rating on Bajaj Consumer Care

Target raised as earnings outlook improves

ICICI Securities has maintained its BUY recommendation on Bajaj Consumer Care after the company delivered a stronger-than-expected performance during the first quarter of FY27. The brokerage revised its target price upward to Rs 760 from Rs 600, citing stronger revenue growth, expanding margins and meaningful earnings upgrades.

Despite the stock appreciating nearly 2.8 times over the past year, the brokerage believes valuations remain reasonable considering the company's improving earnings trajectory and medium-term growth prospects.

Strong Quarterly Performance Driven by Core Brands

Revenue growth accelerates across key segments

Bajaj Consumer Care reported consolidated revenue of Rs 3.42 billion, representing a robust 24.9% year-on-year increase during Q1FY27. The primary growth engine continued to be the Almond Drops Hair Oil franchise, which delivered healthy volume expansion after adjusting for packaging changes.

The company also witnessed encouraging momentum across its non-Almond Drops portfolio, supported by better distribution, improved product availability and stronger demand in coconut oil products. Management indicated that the acquired Banjara's business has now been fully integrated both operationally and financially, keeping the company on track to achieve its medium-term revenue objectives for the non-core portfolio.

Distribution Network Continues to Expand

Urban and rural demand remain supportive

The research report highlights broad-based growth across multiple distribution channels. Modern trade, e-commerce and quick commerce continued to record impressive momentum, while the general trade channel also delivered strong expansion.

Urban markets maintained healthy demand across both retail and wholesale segments, whereas rural markets showed signs of meaningful recovery. International operations also contributed positively, with Nepal and Bangladesh posting double-digit growth, partially offset by temporary disruptions in West Asian markets.

Margins Improve Despite Higher Brand Investments

Operating leverage boosts profitability

One of the biggest positives highlighted by ICICI Securities was the company's sharp improvement in profitability.

Gross margins expanded to 61.8%, benefiting from an improved product mix and packaging optimization initiatives. Although advertising and promotional expenditure increased significantly as the company continued investing behind its flagship brands and digital campaigns, operating leverage helped offset these costs.

As a result, EBITDA surged more than 100% year over year to Rs 834 million, while EBITDA margin expanded to 24.4%. Adjusted profit after tax climbed nearly 85%, reflecting the company's improved operational efficiency.

Aarohan Initiative Enters Next Growth Phase

Management shifts focus from expansion to productivity

The brokerage believes Bajaj Consumer Care's "Aarohan" sales transformation initiative is entering a more mature stage.

With rollout nearing completion across most targeted markets, management is now focusing on improving sales productivity and increasing throughput rather than simply expanding geographic reach. Previous implementation has already generated superior growth compared with markets where the initiative has not yet been introduced, giving confidence that productivity gains can continue supporting revenue growth over the coming years.

Earnings Outlook Remains Positive

Analysts upgrade financial estimates

Reflecting the stronger-than-expected quarterly performance, ICICI Securities has upgraded its earnings projections.

The brokerage increased its FY27 earnings per share estimate by approximately 24% and its FY28 estimate by roughly 28%. It now expects revenue, EBITDA and profit after tax to grow at healthy compound annual growth rates over FY26-FY28, supported by continued expansion of the product portfolio, better operating efficiencies and sustained margin improvement.

Stock Levels Investors Should Watch

Current price, target and implied upside

Based on ICICI Securities' assessment, investors with a medium-term investment horizon may consider the stock attractive, with the brokerage expecting continued earnings compounding supported by execution improvements and expanding profitability.

Risks That Could Affect the Investment Case

Commodity inflation and product concentration remain key concerns

While the brokerage maintains a constructive outlook, it also flags several important risks. The company continues to derive a significant portion of its business from the Almond Drops franchise, creating concentration risk. Rising commodity prices could pressure margins if cost inflation accelerates beyond expectations, while weaker consumer demand or unsuccessful new product launches could moderate future growth.

Management also acknowledged potential uncertainty arising from input cost inflation and geopolitical developments that could influence profitability in coming quarters.

Investment Takeaway

Execution momentum supports long-term optimism

ICICI Securities believes Bajaj Consumer Care has transitioned into a phase where growth is becoming increasingly predictable, supported by stronger brand execution, improving channel performance and disciplined cost management. The brokerage expects continued expansion in both revenue and profitability while maintaining EBITDA margins in the low-to-mid-20% range.

For investors, the report suggests that the combination of accelerating earnings, expanding margins, productivity initiatives and an upgraded target price of Rs 760 continues to justify a BUY recommendation despite the stock's strong rally over the past year.