BAJAJCON

Delivers Strong FY26 Recovery

staged a sharp turnaround in FY26, with consolidated revenue rising 21% YoY to ₹1,165 crore and EBITDA margin expanding 575bps to 19%. Growth was broad-based, led by its flagship Almond Drops Hair Oil (ADHO) and supported by its emerging portfolio. Investors cheered the strong Q4FY26 beat, sending the stock up 11% post-results, though analysts remain cautious given the sharp rally and rising input costs. Operational Highlights Core ADHO brand: revenue growth >20% for FY26; Q4 volume growth near double digits (adjusted basis). Growth portfolio: ₹225 crore in FY26 sales; target to more than double to ₹500 crore in three years. Project Aarohan: now covers two-thirds of business, driving distribution and brand investments; full coverage expected in FY27. Q4FY26 Performance Operating revenue: ₹327 crore (+30.4% YoY). EBITDA margin: 23.4% (+1,067bps YoY), aided by price hikes and favorable base. Multi-quarter high margin, though sustainability remains a key monitorable. Cost Pressures & Risks Rising input costs: Light liquid paraffin (LLP) prices surged in Q4FY26. Refined mustard oil prices remain elevated. West Asia war driving volatility in raw materials. ICICI Securities flagged Q1FY27 as a critical test for margin sustainability. Mix-led moderation in margins possible; price hikes likely. Valuation & Outlook Analysts raised FY27–28 earnings estimates on strong financials. Stock has delivered 85% return YTD in 2026, prompting some caution. Elara Securities downgraded rating from Buy to Accumulate due to valuation run-up. Current valuation: ~29x FY27E earnings (Bloomberg consensus). Margins expected in low-to-mid 20s, with growth supported by ADHO and portfolio diversification. Conclusion Bajaj Consumer Care’s FY26 recovery underscores brand strength, distribution expansion, and pricing power. While growth momentum is strong, raw material volatility and elevated valuations temper near-term optimism.