Target: ₹715

CMP: ₹591

Bajaj Consumer Care’s Q1FY27 results were ahead of expectation; while revenue came in line with estimate, led by continued strong momentum in ADHO (Almond Drop Hair Oil) portfolio (volume growth est. 11-12 per cent) driven by strong growth in sachets. EBITDA margin was ahead of expectation on the strength of better gross margin expansion (price hike), cost savings to the tune of 600 bps year on year and operating leverage.

Q2FY27 gross margin is expected to remain under pressure as compared to Q1, on account of higher raw material cost. However, Q3 and Q4 are expected to see recovery as recent raw material price trend saw a decline. Moreover, the current EBITDA margin of 24.4 per cent is on the upper end of guided range; while long-term EBITDA margin guidance is expected to be in low to mid 20s range.

We remain constructive on Bajaj Consumer Care’s long-term growth strategy. Sustained double-digit growth, an improving product mix and operating leverage are expected to drive Revenue/EBITDA/PAT CAGR of 14 per cent/20 per cent/20 per cent, respectively, over FY26-29E.

We have revised our one-year DCF-based TP to ₹715 (earlier: ₹690). Given the sharp appreciation in the stock price, up about 88 per cent since April 2026 (about 25 per cent since our initiating coverage) and the limited upside from the current level, we have changed our rating on the stock from Buy to ‘Add.’

Published on July 14, 2026