Bajaj Consumer Introduces 100% Henna Product to Revitalize Hair care
Bajaj Consumer Care Ltd (BBCL), a prominent fast-moving consumer goods (FMCG) company, has recently unveiled a revolutionary 100% Henna product in the haircare segment. This launch comes at a time when the market experiences subdued demand and volume growth due to inflationary pressures.
The henna haircare products market features several well-known brands, including Godrej Nupur Henna, Biotique, Khadi, Jovees, and VLCC.
During the fourth quarter of FY23, BBCL’s hair oil segment saw marginal growth in urban areas, while remaining relatively stable overall. However, the category faced challenges stemming from a 6% decline in rural demand, primarily caused by inflationary pressures, as reported by ICICI Securities. Consequently, the brokerage firm has revised its target price from Rs 250 to Rs 200.
Industry analysts have noted that revenue growth has been sluggish due to a general slowdown in the hair oil category. BNP Paribas’ analysis of category trends reveals a consistent compounded annual growth rate (CAGR) in hair oil revenue of nearly mid-single digits over the past seven years, indicating ongoing growth challenges as market saturation increases.
While the recent trends in raw material costs provide some reassurance for profit margins, analysts also caution that the benefits of price hikes may diminish or even reverse, potentially leading to a decline in value growth.
“The street’s revenue estimate appears optimistic, especially without factoring in the potential impact of El Nino on rural spending,” according to the BNP Paribas report.
In the fourth quarter of March 2023, the company recorded a consolidated net profit of Rs 40 crore, a 13% increase compared to the same quarter in the previous year. Furthermore, BBCL’s revenue from operations climbed by 15% to Rs 246 crore in the same quarter, primarily driven by consistent volumes.
Over the past six months, Bajaj Consumer’s stock price has risen by 14%. As of 10:04 pm, the company’s share price was Rs 192 apiece, a decrease of 0.13% from the previous day’s close on the National Stock Exchange.
About Bajaj Consumer:
Bajaj Consumer Care Ltd., previously named Bajaj Corp Ltd., is an Indian company that specializes in hair care consumer goods. It operates as a subsidiary of the Bajaj Group, which was founded by Jamnalal Bajaj.
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