Bajaj Consumer’s consolidated operational revenue during the quarter grew in single digits - 2.5 per cent at Rs 220 crore due to demand weakness. It had posted revenue of Rs 215 crore in the year-ago quarter. Net profit was up 11 per cent year on year (YoY) to Rs 56 crore, due to lower tax outgo. EBITDA (earnings before interest, tax, depreciation and amortisation) margin expanded around 20 basis points (bps) YoY to 28.6 per cent.
Meanwhile, promoters of the company, who had pledged nearly 60.72 per cent of their stake to lenders as on June 2019, have now increased their pledging. The company's September quarter shareholding pattern reveals that 62.83 per cent of total promoters holding were pledged.
Bajaj Consumer is looking to address key concerns on high single category concentration, high revenue dependence on single brand, with the help from Bain & Company, to further improve hair oil category performance and promoter pledge.
“Under Project Vistaar (test marketing in states which contributes around 7 per cent of sales), the company has achieved a 14 per cent YoY growth in primary sales and 19 per cent in secondary sales, which is encouraging. However, we have lowered our topline estimates by 3-4 per cent due to continued rural weakness, and after fine tuning our cost assumptions, our earnings estimates are down 2- 4 per cent for FY20-22e,” analysts at SBICAP Securities said in a result review.
In the past three months, the stock has underperformed the market by falling 36 per cent, as compared to a per cent decline in the S&P BSE Sensex.