ICICI Securities has reaffirmed its bullish stance on Bajaj Consumer Care, maintaining a BUY recommendation with a 12-month target price of Rs300, representing a potential upside of nearly 29% from current levels. While the company posted a subdued Q1FY26 with muted volume growth, robust focus on its flagship Almond Drops Hair Oil (ADHO), successful Banjara’s integration, and ongoing cost rationalization underpin projections of a business turnaround. Strategic initiatives, margin expansion from favorable mix and commodity prices, and aggressive brand investments all point to a brighter earnings trajectory. Investors should closely watch valuations and execution as Bajaj Consumer Care emerges from its transition phase.

ICICI Securities Maintains BUY: Investment Thesis

ICICI Securities sustains its BUY recommendation for Bajaj Consumer Care on the back of anticipated business revival and attractive valuations. The 12-month target is set at Rs300, implying an upside of 29% from the last closing price of Rs232. The conviction is rooted in a blend of operational turnaround, margin levers, and effective strategic execution post-management realignment.

Quarterly Performance: Subdued Start, Green Shoots Visible

Bajaj Consumer Care’s Q1FY26 performance was tepid, with reported revenue rising 7.4% YoY to Rs2,667mn. Stripping out the Banjara’s acquisition impact, organic revenue growth clocked 3.7%.

• Core Almond Drops Hair Oil— the engine room for the business— saw 4% value growth but volume remained static, indicating price-led gains with flat demand.
• Small packs and sachets performed well, reflecting traction in lower price-pointed segments, while larger packs lagged.

On the positive, Bajaj 100% Pure Coconut Oil posted a strong >20% YoY growth, affirming expansion in the non-ADHO franchise. However, international business lost steam, citing demand weakness in GCC, Africa, and other ROW markets, though Nepal and Bangladesh offered a silver lining with teen-figure growth rates.

Margin Expansion: Cost Discipline Meets Tactical Advertising

One of the quarter’s key takeaways is robust gross margin improvement. Consolidated gross margin surged by 158bps YoY to reach 57.7%.

• The boost came from lower input costs, richer product mix, and ongoing rationalization of the portfolio. Gross margin sustenance is expected, buttressed by stable commodity prices and product premiumization.
• Advertising and sales promotion (A&SP) spends soared 46% YoY for ADHO, highlighting a renewed push to revive the flagship brand through aggressive media investment. Company-wide, A&SP was at 14.4% of sales, down from 15.5% a year ago, showing effective cost calibration.
• Despite a 23.6% YoY jump in staff costs—driven by distribution expansion and capability upgrades—EBITDA grew 10.6% YoY to Rs405mn, and EBITDA margin expanded by 45bps YoY to 15.6%.

Growth Initiatives: Aarohan Phase 2, Banjara’s Integration, and Strategic Realignment

Bajaj Consumer is actively rolling out Project Aarohan Phase 2 in new Hindi-speaking markets, including Rajasthan, Delhi, Haryana, and Chhattisgarh, with Maharashtra and West Bengal in the pipeline.

• This initiative aims to improve general trade (GT) coverage in urban and satellite towns. Project Aarohan has already yielded discernible enhancements in GT servicing and wholesale distribution.
• Integration of Vishal Personal Care (Banjara’s), now a fully-owned subsidiary as of May 2025, is on track, and is being supported by a consulting partner. The Banjara’s portfolio exhibited high single-digit standalone growth in Q1, contributing positively to the consolidated top line.
• The company’s new CEO, Mr. Naveen Pandey, is orchestrating a strategy that focuses on deeper GT penetration, premiumization of core products, and scaling high-potential adjacencies—signals of an intent to future-proof the business.

Valuation and Stock Levels: Target and Support Pivots

ICICI Securities’ DCF-based fair value estimate assigns a target price of Rs300—implying a forward P/E of 24x on FY27E earnings. The stock previously traded in a 52-week range of Rs289-151 and currently offers a compelling risk-reward. Key technical support is visible around Rs200, where prior accumulation and institutional interest was observed. Investors with a 12-18 month horizon are positioned to benefit most.

Financial Snapshot: Key Metrics at a Glance

Risk Factors: What to Watch Out For

Risks remain, including overdependence on the ADHO brand, potential input cost inflation, and the uncertain payoff of new product launches. Failure to ramp up volumes, ineffectiveness of strategic projects, or margin compression could derail the earnings trajectory. Investors should also be cognizant of international business volatility.

Shareholding Trends and Market Sentiment

Promoter holding stood steady at 41% as of June 2025, with institutional investors trimming exposure to 27.8%, offset by an increase in retail and others to 31.2%. This evolving shareholding structure could influence stock liquidity and volatility ahead.

Conclusion: Compelling Turnaround, But Execution Is Key

In summary, Bajaj Consumer Care stands at a critical inflection point. Amid a challenging Q1 print, the underlying metrics are firming up—margin expansion, focused investments, distribution deepening, and successful integration of acquired assets all point to resilient underlying momentum. For investors looking beyond the noise, the current market levels offer an attractive entry for a mid-term play. That said, vigilant tracking of execution and demand revival—especially in rural and international sectors—remains imperative. The smart money is watching closely, and so should you.