Bajaj Corp - Strong on Both Volume and Margins; Result Update Q4FY15 ::Edelweiss

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Bajaj Corp.: Solid performance; retain BUY :: Kotak Securities

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Bajaj Corp.: Solid performance; retain BUY
 Solid volume-driven outperformance; ADHO volume growth jumps to 19%
yoy
 Margin expansion led by higher GMs; correction in LLP a key near-term
tailwind
 We remain positive; retain BUY with a revised target price of Rs495 (Rs390
earlier)

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Bajaj Corp - Regaining Lost Ground; Result Update Q3FY15 :: Edelweiss

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Bajaj Corp Ltd. (BCL) | Q3FY15 Result Update| Stellar Performance: Strong volume growth; Maintain HOLD | TP Revised from Rs.279 to Rs.427 :: IndiaNivesh

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Bajaj Corp Ltd. | Q2FY15 Result Update | Mixed-bag Performance: Strong volume growth; Maintain HOLD | TP Revised from Rs.215 to Rs.279:: IndiaNivesh

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Bajaj Corp: ICICI Securities, PDF link

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Strong positioning in single category…
We recently met the management of Bajaj Corp (BCL) to understand the
company’s long term growth opportunity and the triggers for its future
growth potential in the FMCG (hair and skin care) space. The company is
the leading player in the light hair oil (LHO) category in India with 58.5%
volume and 60% value share (June, 2014). The key brands and offerings
of BCL in LHO segment are Bajaj Almonds Drop Hair Oil, Bajaj Kailash
Parbat Cooling Oil, Bajaj Brahmi Amla/Amla Shikakai Hair Oil and Bajaj
Jasmine Hair Oil. The company generates ~90% of its revenues from
LHO segment and ~10% from other personal care brands in its kitty. BCL
entered the skin care segment in August, 2013 with the acquisition of No
Marks. Led by BCL’s dominance in the LHO segment, its revenues have
grown at a robust CAGR of 22.4% in FY09-14 to | 671.7 crore. The
company has exhibited strong EBITDA margins of 20%+ over the years,
thereby aided its earnings to post growth at 26.2% CAGR (FY09-14).
Shift in consumer preferences aids growth for Bajaj Corp
Though Indian consumers were predominantly coconut hair oil (~| 3400
crore) users, the increasing aspirational demand supported by higher per
capita income has shifted the consumer preference towards light and
perfumed hair oil segment (~| 3900 crore), driving growth for BCL.
According to the company, for every 100 new users for Bajaj, ~40 are
generated via a shift from coconut oil users, 18-20 from other LHO brand
users, 18-20 from unbranded users and the rest from other segments.
Currently, ~59% of Bajaj Almond Drops users lie within the age of 15-39
years with ~54% male users and 46% female users. With LHO being at a
premium price, currently ~65% of sales come from urban India while
35% comes from rural India with North and East India constituting ~70%
of LHO sales. Further, with the hair oil (HO) industry in India still having
~30% of unbranded players, we believe there is still room for growth in
the company’s volumes. To aid its future growth, BCL expanded its LHO
portfolio by launching Kailash Parbat cooling hair oil in the | 875 crore
cooling hair oil segment. It has successfully grown its share from nil in
April, 2011 to 2.4% in June, 2014.
Entry into skincare segment
Bajaj Corp entered the skin care segment in August, 2013 with the
acquisition of No Marks. No Marks has 12% share in the ~| 350 crore
anti-marks skin care segment. The category has been growing at 27% per
annum. Currently, the brand constitutes ~7% of BCL’s revenues (| 14.1
crore in Q1FY15). The company’s aim is to invest aggressively into the
brand and revive the brand’s equity in the next two or three years.



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Buy Bajaj Corp:: Cost efficient player- Motilal Oswal

Cost efficient player
Possible resolution of mining ban, a key trigger; Buy
 Birla Corp (BCORP) is one of the most cost efficient cement producers, with average
cost of production being consistently 8-10% lower than the MOSL Cement Universe.
 We expect strong scale-up in BCORP's volumes over FY12-15 on the back of stabilization
of recently added capacities and favorable market mix.
 The ban on limestone mining at its Rajasthan plant has impacted its volumes and cost
adversely. Resolution of the mining ban would be a key trigger.
 Strong balance sheet renders flexibility to expansion as both expansion plans marred
by litigation. We value BCORP at INR464/share (4x FY15E EV/EBITDA with implied EV/
ton of USD52). Maintain Buy; our target price implies 46% upside.

Bajaj Corp:: Strong Q3, but upsides limited – Religare

Strong Q3, but upsides limited – Maintain HOLD
BJCOR reported Q3FY13 net sales/EBITDA/adj. PAT growth of 31.8%/50.3%/ 46.2%, which came in ahead of our and consensus estimates. Volume growth was strong at 22.3% with margins expanding 360bps on lower LLP prices. We upgrade our FY14/FY15 earnings estimates by ~13% and roll over to March’15 earnings (from September’14) to get a revised March’14 TP of Rs 275. Maintain HOLD on likely volume growth moderation and limited upside from current levels.

Bajaj Corp Ltd. Rural penetration led robust volume growth…::Ventura

Outlook Bajaj Corp Ltd (BCL) continued to post a robust volume growth of 23.4% in its flagship brand ADHO (Almond Drops Hair Oil) primarily driven by rural penetration (increased distribution reach). We have incorporated FY15 forecasted financials from this quarter and accordingly expect revenues to grow at a CAGR of 24.7% to Rs 916.9 crore over the forecast period of FY13-15 on the back of steady volume growth (~20% avg.) and sustained leadership position in its flagship brand Almond Drops. At a CMP of Rs 253, Bajaj Corp is trading at 19.6x and 17.7x its estimated earnings for FY14 and FY15. Given the stretched valuations, we reiterate a HOLD on the stock with the revised price target of Rs 271 (as against our revised target of Rs 209) representing a limited potential upside of ~6.2%. However, prospective inorganic growth, strong cash availability (~Rs 477 crore) and potential new product launches is an added attraction. Key Takeaways BCL yet again reported a robust top-line growth of 31.8% YoY to Rs 148.1 crore in Q3FY13 as against Rs 112.3 crore in Q2FY12 primarily led by volume growth of ~23.4% YoY from its flagship brand (Almond drops). The growth is also attributable to the rural penetration on the back of increased distribution reach (2.54 mn retail outlets vs. 2.43 mn in Q2FY13). The company reported net profit at Rs 42.2 crore in Q3FY13 as against Rs 28.9 crore in Q3FY12 (+46.2% YoY) partially attributable to the price hike (~8.5%) taken in April 2012 and softening raw material prices (benefit of ~Rs 1.85 crore in Q3FY13).
EBITDA margin at 29.03% for the quarter, expanded by 352 bps YoY on account of price hike taken in April, 2012 and decline in RM costs (LLP – Rs 79.1/kg; ~ -4.5% YoY) partially offset by rising refined oil prices (Rs 80.2/kg; +14.1% YoY). Moreover, BCL has entered into a deal with its LLP supplier (its key raw material; ~36.8% of total cost) which will enable it to buy LLP at an average price of ~Rs 75/kg in Q4FY13. This, we believe will help BCL to maintain its EBITDA margin in the range of ~26-27% in FY13 amidst volatile raw material prices.
BCL’s flagship brand ADHO witnessed a healthy volume growth (23.4% YoY) and value growth (33.1% YoY) which was far ahead from the LHO market growth (volume - ~17.9% YoY and value - ~26.1% YoY). The volume and value market share enjoyed by Almond drops continue to command leadership status i.e. ~51.9% and ~54.6% respectively. Moreover, we believe that Dabur’s foray into LHO category (Dabur Almond Hair Oil)

Sizzling Stocks - Bajaj Corp, Ambuja Cements, :: Business Line

BAJAJ CORP:: Diwali Picks - November 2012 ::Anand Rathi Top 7 - Diwali Picks

Company Introduction: Bajaj Corp. is part of Shishir Bajaj Group of companies. The Company's brands include Bajaj Kailash Parbat Thanda Tel, Bajaj Almond Drops Hair Oil, Bajaj Brahmi Amla Hair Oil, Bajaj Amla Shikakai Hair Oil and Bajaj Jasmine Hair Oil. The Company has five production facilities.
Investment Arguments Rs. 70bn Indian hair oils market emerged as one of the fastest growing segments in the Indian FMCG industry and amongst it, Light Hair Oils (LHO) lead the pack. We expect hair oil market to touch Rs100bn by FY15, indicating a 13% CAGR over the next three years. The LHO category has managed to grow at a CAGR of 28.3% over the past four years versus 21.3% growth in the total hair oils market. Bajaj Corp Ltd. (BCL), maker of ‘Bajaj Almond Drops’ emerged as the dominant player in the growing LHO category and enjoys market leadership with a share of 54%.
Expected Value: 247 Sector -FMCG
BCL’s net cash balance stood at Rs3.4bn in FY12 which placed BCL strongly to leverage on inorganic growth opportunities. Over the period, BCL has developed strong distribution networks which spread across India. The company enjoys deep distribution networks in both, the urban and rural India. Currently, BCL‘s products reach to over 2.16mn retail outlets across India. As on Sep, 2012, BCL has 6036 direct distributors and 11,258 wholesalers, both at the rural and urban markets.
Valuation
Most of the FMCG companies are quoting around 20-25x for FY 15 PE multiple. However Bajaj Cor. is attractively valued in-spite of its attractive growth. We valued the stock at 18x for FY15 earning 20% discount to sector median P/E. We value the stock at Rs. 247, at a target PE of 18x FY15e earnings.

BAJAJ CORP:: Diwali Picks - November 2012 ::Anand Rathi Top 7 - Diwali Picks

Company Introduction: Bajaj Corp. is part of Shishir Bajaj Group of companies. The Company's brands include Bajaj Kailash Parbat Thanda Tel, Bajaj Almond Drops Hair Oil, Bajaj Brahmi Amla Hair Oil, Bajaj Amla Shikakai Hair Oil and Bajaj Jasmine Hair Oil. The Company has five production facilities.
Investment Arguments Rs. 70bn Indian hair oils market emerged as one of the fastest growing segments in the Indian FMCG industry and amongst it, Light Hair Oils (LHO) lead the pack. We expect hair oil market to touch Rs100bn by FY15, indicating a 13% CAGR over the next three years. The LHO category has managed to grow at a CAGR of 28.3% over the past four years versus 21.3% growth in the total hair oils market. Bajaj Corp Ltd. (BCL), maker of ‘Bajaj Almond Drops’ emerged as the dominant player in the growing LHO category and enjoys market leadership with a share of 54%.
Expected Value: 247 Sector -FMCG
BCL’s net cash balance stood at Rs3.4bn in FY12 which placed BCL strongly to leverage on inorganic growth opportunities. Over the period, BCL has developed strong distribution networks which spread across India. The company enjoys deep distribution networks in both, the urban and rural India. Currently, BCL‘s products reach to over 2.16mn retail outlets across India. As on Sep, 2012, BCL has 6036 direct distributors and 11,258 wholesalers, both at the rural and urban markets.
Valuation
Most of the FMCG companies are quoting around 20-25x for FY 15 PE multiple. However Bajaj Cor. is attractively valued in-spite of its attractive growth. We valued the stock at 18x for FY15 earning 20% discount to sector median P/E. We value the stock at Rs. 247, at a target PE of 18x FY15e earnings.

Report on Bajaj Corp - IndiaNivesh Sec

Bajaj Corp Ltd. (BCL) | Q2FY13 Result Update | Inline Performance - margin expansion led to positive surprise | Q2FY13 Result Highlights: Bajaj Corp Ltd (BCL) performance in Q2FY13 quarter was in-line with our expectations. BCL’s top line grew by 27.2% yoy (down 1.6% qoq) to Rs.1,359mn (INSPL est: Rs.1,377 mn) led by 18.70% yoy and 8.5% yoy growth in volume and pricing, respectively. Driven by healthy revenue, EBITDA grew 42.6% yoy and 0.5% qoq to Rs.391 mn (INSPL est: Rs.384 mn). EBITDA margin expanded +310bps yoy to 28.8% (v/s INSPL est: 27.9%) on-account of decline in material and advertisement expenditures, partially offset by increase in other expenditures. During the quarter, LLP prices declined 6% yoy (+0.6% qoq) and refined oil prices went up by 26% yoy (+11.6% qoq). BCL reported other income of Rs.98 mn v/s Rs.90 mn in Q1FY13 and Rs.99mn in Q2FY12. Tax rate during the quarter remain constant at 20% on qoq basis (but below on yoy basis - 22% in Q2FY12). Net profit grew 33.7% yoy (up 2.1% qoq) to Rs.384 mn (INSPL est: Rs.364mn) led by higher EBITDA base and other income. Adjusting other Income, net profit went up 51.7% yoy, however down 0.1% qoq to Rs.286mn. Valuations: At CMP or Rs.187, stock is trading at 19.2x FY13E and 16.1X FY14 earnings estimates; which is 49%/81% discount to average FMCG industry forward P/E multiples. We like the BCL’s ability to report high double-digit revenue growth on back of strong brand, deep distribution network and leadership position in high growth almond light hair oil segment. Further, utilization of cash for acquisition and new product launch seems to be a right strategy to diversify revenue risk. We maintain our HOLD rating with upward revision in the target price of Rs.205 (9.6% upside potential) on stock.

Regards

IndiaNivesh Research

Bajaj Corp ::Well Oiled ::, nirmal bang,

Well Oiled Bajaj Corp (BCL), the market leader (with a 54% market share) in the light hair oil (LHO) segment, has been growing faster than the overall hair oil market driven by increased preference for non-sticky LHOs and the company’s unique product positioning (almond-based oil) backed by aggressive promotion. We expect BCL to gain further market share as the current trend is likely to continue, which along with stabilisation of its key raw material LLP (liquid light paraffin) prices would drive earnings CAGR of 22% over FY12-FY14E as against 20% CAGR over FY10-12. We expect BCL to generate free cash flow of Rs2.5bn and post improvement in RoCE/RoE by 366bps/220bps, respectively, over FY12-FY14E. Given its strong brand equity, higher cash flow generation and dividend payout (57%) along with improvement in return ratios, we believe the current discount (44%) to its peers is very steep and unwarranted. We assign a Buy rating to BCL with a TP of Rs220 based on 18.3x FY14E earnings.

52-WEEK BLOCKBUSTER: BAJAJ CORP: Business Line,

Bajaj Corp (Buy@Rs.130, Target Rs.200) LKP Advisory

The story so far ………..

Bajaj Corp - BCL came out with its Rs3bn IPO in August 2010 and is a key player in the LHO – Light Hair Oil category with its flagship brand – ADHO – Almond Drop Hair Oil accounting for more than 92% of its revenues and the rest coming from other oils like Brahmi Amla, Amla Shikakai & Kailash Parbat. ADHO commands over 50% market share both in volume and value terms as its strong brand equity with pricing power backed by small SKU sales leverages the distribution strength.

ADHO being the only hair oil available in 3ml sachets and 50ml bottles is growing market share year after year and we believe this platform can be extended to other personal care products going forward to leverage the connotation of Almonds with nutrition.

Bajaj Corp Market-share gains continue; we raise estimates, retain Buy :: anand rathi

Bajaj Corp
Market-share gains continue; we raise estimates, retain Buy
In FY12, Bajaj Corp gained market share in Bajaj Almond Drops and
Kailash Parbat hair oil. Management is confident of maintaining
margins as it has hiked prices 8.5% to pass on raw material costs. We
raise FY14 estimates 3% and retain our Buy rating, with a price target
of `189 (earlier `155).

Buy Bajaj Finserv; Target : 772 : ICICI Securities, PDF link

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http://content.icicidirect.com/mailimages/ICICIdirect_BajajFinserv_CompanyUpdate.pdf


P l a y   o n   I n d i a n   i n s u r a n c e   i n d u s t r y …
Bajaj Finserv is the financial services arm of the Bajaj group generating
annual profit of | 1148 crore, surging 100% YoY in FY11. The standalone
profit came at | 188 crore. Consolidated return ratios also remain strong
with RoA of 2.6% and RoE of 35.1% on an average in spite of the
insurance business being incorporated.
Insurance, both life and general, contributes 90.6% in consolidated
revenues and 76.6% in PBT, being the single major business segment.
Lower general insurance profit impacted the margins of the insurance
segment at 9.3% in FY11. It maintains lower margins mainly due to the
general insurance knock. The standalone life business had 11.3% PBT
margin and 16.6% NBAP margin in FY11. The financing business, on the
contrary, has higher margins contributing 20.5% to profit. It clocked
strong growth in disbursements while maintaining healthy NIMs.

Valuations of most companies are attractive even now: Sampath Reddy, chief investment officer, Bajaj Allianz Life Insurance (ET)

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Sampath Reddy, chief investment officer of Bajaj Allianz Life Insurance , sees lot of valuation comfort at current market levels. "Valuations are very attractive at current price-levels. Investors will pocket reasonably good returns even if they invest now," said Reddy, who manages Rs 40,000 crore worth of assets, in an interview to Shailesh Menon. Excerpts:

Markets have logged significant gains for investors since the beginning of this year; short-term rates are holding up. Where should people invest in such a scenario?

Equities, without any doubt... equities are positioned very well for further gains. Debt looks good from a short-term point of view, but then most of the capital appreciation at longer end of the curve has already taken place. The ten-year paper has already corrected quite a lot; it is likely to consolidate at around 8%. Equity returns have not been that great if you consider a five-year horizon. I think, we're probably getting into a leg of good equity returns going forward.

What about short-term rates?

Short-term papers are still trading at 10% levels... Short-terms yields are on the higher side and it will continue to be so till March-end. Yields may come off in and around April. Despite several liquidity injection procedures adopted by RBI, there is a severe liquidity crunch in the market. Banks are borrowing at 10% from CD market and 90-day T-bills are trading at about 9%; such high yields do not come that frequently. We expect one more round of CRR cut anytime soon. This may reduce liquidity stress to some extent.

Are you worried that markets have risen too soon, too fast?

There's valuation comfort even at current market levels. Valuation of most companies - barring a few FMCG and pharma firms - are attractive at current pricelevels. Investors will pocket reasonably good returns even if they invest now. In our case, we started buying stocks from November onwards. When market surged, we sold some of our profitable investments. We'll come back to full purchase mode in another month or so... we expect a correction to set in by that time. Market participants didn't get a hint of the market rally in January. Most traders and institutional investors had structured their portfolios expecting a bearish phase for about 6-8 months. Looking at the flows, we get a sense that offshore ETFs invested large chunks of money in Indian equities in January. Money has not started to come from long-only foreign funds. The correction we saw last week could just be a fallout of the strong rally that we saw in January. In plain words, traders and institutional investors made use of the negative news flow from China to book some profits.

Should investors shift their investments from defensive to fast-moving stocks?

We're currently buying stocks that were beaten down on account of higher interest rates and growth-related issues. We're very bullish on metal stocks and have made minor additions in the infrastructure space also. We're not very keen to invest in road and port builders as many of these companies have bid for projects at competitive rates; this could result in lower profit margins for these companies. We're still not investing in real estate. Our portfolios still have a lot of pharma and FMCG stocks, but we're reducing our exposure to these sectors.

What about IT and banking shares?

IT stocks look good; they are poised to see a volume growth of 10-12%, thanks to continued order-flows from US software companies. But then, IT stocks are very expensive at current levels. Investors need to bear in mind that IT is no longer a high growth, highly profitable and high ROE business. IT stocks may witness some rerating soon. In the case of banking, we're more comfortable buying private sector banks. Despite rate cuts, public sector banks will continue to have higher NPAs on their books in the coming quarters. Their loan exposure to sectors like manufacturing and infrastructure is quite worrisome. Also, we're not expecting any major rally in PSU banks from current price levels.

Bajaj Corp report by GEPL (pdf link)

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click to view report

The company has maintained strong growth trajectory during the quarter riding on the strong growth in light hair oils category. However concerns remain on revenue mix as most of the revenues are contributed by single brand Bajaj Almond drops. Any acquisition could be trigger to stock re-rating. The stock is trading at 10.5x multiple of FY13 consensus EPS of Rs10.4.