Bajaj Consumer Care Ltd (BAJAJCON) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to Bajaj Consumer Limited Q2 FY '27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manoj from ICICI Securities Limited. Thank you and over to you Mr. Manoj.
Manoj (ICICI Securities Limited): Hi everyone. It's a wonderful good morning you know from the ICICI Securities research team. It's our absolute pleasure once again to host the management of Bajaj Consumer Care you know for the quarterly conference call. The company is represented today by Mr. Jaideep Nandi, Managing Director, Mr. Dilip Kumar Maloo, Chief Financial Officer, Mr. Aakash Gupta, Head - Finance. We continue to have a constructive stance stance on the Bajaj business and the stock,
Manoj (ICICI Securities Limited): listen to those remarks, post which we'll open the floor for Q&A. Thank you, sir.
Naveen (Bajaj Consumer Care Ltd): Thank you Manoj, and good morning, everyone. Welcome to the quarter two FY27 call for Bajaj Consumer Care. In the last quarter, we delivered a revenue of 333 crores with a growth of 27% against the same quarter last year. On margins, we delivered an EBITDA of 83 crores with an EBITDA margin of 25% and a PAT of 70 crores with a PAT margin of 21%. At the end of the first half of the year, our revenues are up 28% to 674 crores. Our H1 EBITDA is 167 crores, which is a growth of 85% over the previous H1. And our PAT is 141 crores, which is a 75% growth over the previous H1. What I'm particularly happy about is that this performance came amidst volatile and dynamic business environment. And despite all the challenges, we've been able to deliver these very strong set of numbers. In line with our commitment to strengthen our core, Almond Drops hair oil continues with the strong performance in this quarter and has delivered double-digit unit volume growth. This growth came across pack groups and sales channels. And while all pack groups have done well, the growth was particularly led by small and medium-sized packs, which outperformed the overall brand. As part of our commitment to further strengthen Almond Drops franchise, we launched a new enhanced positioning supported by a TV campaign based on hair strength leading to beauty. We have gone live with this campaign towards the end of the previous quarter. And in this quarter, you will see this being supported by a 360-degree campaign with enhanced the investment behind digital. This for us marks the start of reinvigoration and strengthening the premium position of this brand. And you shall see more action on this front in the coming quarters. Our consolidated ASP spend for the quarter were up 7% over the same period last year, and are up 18% on H1 basis. We continue to maintain robust SOV SOM ratios in traditional and digital media. And we have carefully optimized a non-working ASP and reworked our media operating cycles to create some spend efficiencies. As we move to the growth portfolio, the coconut franchise delivered a strong volume growth across channels. This quarter also saw the relaunch and new launches in the several of the growth portfolio smaller brands. In Amla oils, we have refined the consumer proposition and are testing the new mix in general trade. In body lotion, we have upgraded both the product and packaging, and will test it on e-commerce. In Banjara's, we have introduced packs that extend the brand into large adjacent categories, which could offer significant growth potential for us if we are successful. At an overall level, we have substantially improved the profitability of the growth portfolio and remain committed to building it into a second growth engine for the organization, both in terms of revenue and margins. This quarter saw continued momentum in our general trade channel, which grew in line with organized trade, and both channels delivered growth in the strong mid-20s. Within GT, both urban and rural business performed well, with rural continuing to grow marginally ahead of urban. Within organized trade, both modern trade and e-commerce performed well with growth coming across sub-channels and customers. Quick-comm continued its scale-up and remains the fastest growing sub-channel for us. In this quarter, we have also come close to completing our immediate objectives under the Project Aarohan, which has been a massive effort from our sales team over the past eight quarters. Spread across three phases, we covered GTM transformation across 13 key states. We've been able to add over 1 lakh outlets, 1,000-plus distribution points, and have been able to close over 600 van routes, achieving an expansion in direct reach and a reduction in fixed S&D cost. While the work of infra addition for this stage is largely done, our teams will continue to drive efficiency and attempt to improve throughput in these outlets in the balance of year. But our work here is not over as we will quickly move to Aarohan 2.0. In Aarohan 2.0, we will focus all our energies on expansion of our direct reach in urban by 10% and in rural by more than that over the next six quarters. In international business, the rebound which we saw in quarter one continues in quarter two, and we have performed well across country clusters. This channel for the full H1 has grown ahead of the company growth. And except for Bangladesh, most of our other key markets individually have also grown ahead of the company average. Bangladesh is witnessing a tough operating environment and grew in the teens.
Naveen (Bajaj Consumer Care Ltd): Our international business is also improving a sharp improvement in profitability. And on the back of revenue scale up, margin correction, and cost optimization, we are delivering a good improvement in the EBITDA margins of this channel. On the overall margin front, this quarter witnessed continued volatility in key raw material prices due to the West Asia war, edible oil inflation, and the cascading impact of these two things. Our gross margins for the quarter were at 59.9% and overall for the first half of the year at 60.8. Despite the sequential reduction in gross margin, our teams have been able to rally around and deliver very strong savings in fixed costs and employee costs, which have allowed us to deliver a near-term high EBITDA margin of 25% and a PAT margin of 21%. Going forward, the cost environment remains volatile and we stand committed to taking actions as appropriate to protect our P&L while being fair to our consumers. To remind everyone, as an organization, we had taken a calibrated price increase action towards the end of quarter one. We will now follow it up with another round of price increase and MLH reduction in quarter three. In this round, we are approximately taking a 5% increase in consumer price, which will be split roughly equally between frontal price increase of 2% to 3% and a similar contribution coming through MLH reductions. Overall, like always, we remain focused on strengthening our brands through enhanced advertising, digital investments, and by driving innovation. We will continue to work on building our growth portfolio and on expansion of our distribution footprint through RO1 too, all while staying prudent and committed to prudent financial management. Thank you, and back to you and the team Manoj.
Manoj (ICICI Securities Limited): Shall we open the line for questions?
Naveen (Bajaj Consumer Care Ltd): Yes, please.
Moderator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Vinay Shukla from PhillipCapital India. Please go ahead.
Vinay Shukla (PhillipCapital India): Thank you for the opportunity, sir. Question is on outlook side. So, since we are now entering to the higher base with GST tailwind largely behind us and commodity inflation has come back, and given that Bajaj Consumer operates in relatively discretionary category. So, how should we assess the company's growth trajectory over the near term? So, is it achieving a mid-teens growth in '27 and sustaining near double-digit growth in '28? Any outlook if you can share on the same, sir?
Naveen (Bajaj Consumer Care Ltd): Nothing to add Vinay, that's that's what our aspirations are. On the long-term, we want to aspire for a double-digit growth. And yes, for the year, you know, we are expecting a high teens, and that's what we've just said. I don't think so there's any change or any delta to be added there.
Vinay Shukla (PhillipCapital India): Okay.
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