Bajaj Consumer Care Limited — Q1 FY26 earnings call

Call held 12 Aug 2025

Management summary

Bajaj Consumer Care delivered a mixed Q1 FY26, marked by robust consolidated sales growth of 7.4% and significant margin expansion. The company successfully arrested the volume decline in its core Almond Drop Hair Oil brand and saw strong performance in organized trade. However, international business faced a 20% decline, and rural general trade remained sluggish due to internal distribution adjustments. The focus remains on strengthening core brands, integrating the recently acquired Vishal Personal Care, and improving overall profitability.

Highlights

  • Consolidated sales increased by 7.4% YoY to INR 259.5 crores, with stand-alone sales at INR 244.5 crores (3.2% YoY growth).

  • Stand-alone gross margin improved by 140 bps YoY and 240 bps sequentially to 56.6% due to improved product/SKU mix and price increases.

  • Stand-alone EBITDA grew by 11.6% to INR 42.8 crores, with margin expanding by 130 bps YoY and 340 bps sequentially to 17.5%.

  • Almond Drop Hair Oil (ADHO) registered 4% growth, arresting volume decline after several quarters, with broad-based growth across packs.

  • Organized trade (modern trade and e-commerce) grew in double digits, now contributing close to 29% of total sales.

Concerns

  • International business declined 20% YoY due to external headwinds like tariff uncertainty and slowdown in rest of world markets.

  • Rural general trade channel remained sluggish, attributed to internal distribution changes related to the Aarohan program.

  • Input costs for RMO saw 25% inflation, and copra prices nearly doubled, though the overall basket is expected to remain range-bound.

Key financials

  1. Stand-alone Sales ₹244.5 Cr +3.2%YoY
  2. Consolidated Sales ₹259.5 Cr +7.4%YoY
  3. Stand-alone Gross Margin 56.6%
  4. Stand-alone EBITDA ₹42.8 Cr +11.6%YoY
  5. Stand-alone EBITDA Margin 17.5%
  6. Stand-alone PAT ₹39 Cr
  7. Consolidated PAT ₹37.9 Cr

What they filed

Q1 FY27: revenue up 25.3%, net profit up 86.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue234 234 250 273 265 +13%306 +31%327 +31%342 +25%
EBITDA33 26 32 41 48 +45%56 +115%77 +141%83 +102%
Net profit32 25 31 38 42 +31%46 +84%64 +106%71 +87%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex Capex disclosed
    So as of now, we have capacity headroom in our plants to look at that. We have enough headroom maybe for the next couple of years, 2 to 3 years of growth. Having said that, we keep on looking at the efficiency of operations, which is going to be there. And hence, if we need to make any deltas or changes, they might not be very significant to our balance sheet size. But we are not so if you're wanting the question, is there any going to be significant CapEx commitment over the next couple of years? The answer is no.
  • Debt Net ₹0 Cr
    Yes. PAT, the company is -- the company does not have any debt. It's free of debt.
  • M&A Vishal Personal Care (VPC) Acquisition · Integrated

    Enhance portfolio and market presence, align with overall vision, enter Natural and Herbal segment (growing ahead of BPC), leverage VPC's distribution in South for BCCL brands.

    VPC Q1 FY26 top line of INR 15.5 crores (nearly 10% growth YoY like-to-like); EBITDA margin in low teens after excluding one-off expenses.

    As you would be aware, we had previously announced the acquisition of 49% stake in Vishal Personal Care in Q4 '25. This was followed by the completion of the balance 51% acquisition in quarter 1 FY '26. With this, VPCL has now become fully owned subsidiary of BCCL. This acquisition aligns well with our overall vision of the company to enhance our portfolio and market presence. For quarter 1 FY '26 on a like-to-like basis, VPL registered a top line of INR15.5 crores with a nearly 10% growth on a Y-o-Y basis. And we've begun the process of post-merger and integration and have partnered with leading consultant to help us design and integrate the operations.

Guidance & targets

Profitability

  • Operating Margins Profitability · In the year · Medium confidence 17-18%
    But yes, directionally, we want to further improve from our 17% to 18% margin.

    — Naveen Pandey

Growth

  • Business Growth Growth · Ongoing · Medium confidence Double-digit growth
    Looking ahead, we continue to focus on reviving double-digit growth for the business with a strong focus and support to our core brand Almond Drops.

    — Naveen Pandey

Integration

  • VPC Distribution Integration Integration · Ongoing · High confidence 4-5 quarter exercise
    So this distribution integration is going to be, from my estimate, around a 4-quarter exercise to a 5-quarter exercise.

    — Naveen Pandey

What to watch in Q2 FY26

Rural General Trade Growth

Next couple of quarters
Current Sluggish/Negative (internal issue)
Target Positive growth

Why it matters

Recovery in this key channel is crucial for overall volume growth and indicates the effectiveness of internal distribution changes.

So the rural sluggishness in our performance is our internal issue. I am not attributing it to any macros.

Risks & concerns

  • International Business Headwinds

    medium

    International business declined 20% YoY due to tariff uncertainty and slowdown in rest of world markets, particularly affecting distributor/export markets.

    Management acknowledged

  • Rural General Trade Sluggishness

    medium

    Rural general trade channel showed sluggish performance, attributed to internal distribution changes and disruptions from the Aarohan program, which is being fixed.

    Management acknowledged

  • Input Cost Inflation

    medium

    Raw material prices for RMO increased by 25%, and copra prices nearly doubled, though the overall input basket is expected to remain range-bound.

    Management acknowledged

Q&A highlights

7 direct
Rural General Trade Performance Direct
So the rural sluggishness in our performance is our internal issue. I am not attributing it to any macros.

Clarifies that rural weakness is company-specific due to distribution changes, not a broader macro trend, indicating potential for internal resolution.

Asked by Abneesh Roy

Portfolio Focus and A&P Spend Direct
Coming to the ADHO part of the question, yes, I think we've added back investment to ADHO to get to a fair representation of ADHO. I believe that this brand has a lot of potential and we need to support it adequately to drive growth and consumption on this brand.

Confirms strategic focus and increased investment in Almond Drop Hair Oil (ADHO) to drive growth, while acknowledging profitable growth for coconut oil.

Asked by Abneesh Roy

Gross Margin Drivers Direct
So as I said, there is a combination of mix. There's a combination of selective pricing, which is driving the gross margin expansion. And also, we've reduced certain trade investments and spend. So it's a combination of these 3 things, which is driving the gross margin improvement.

Provides clear reasons for the significant sequential improvement in gross margin, indicating a multi-pronged approach to profitability.

Asked by Percy Panthaki

Margin vs. Volume Growth Trade-off Direct
So yes, we will attempt to bring both margins up to respectable levels, which allow us for enough investment ability into the business to invest organically into our brands as well as give us scope for a kitty for an inorganic at a certain point of time. And yes, we will need to drive growth as well.

Management clarifies its strategy to pursue both margin improvement and growth, aiming for a balanced, sustainable approach rather than a trade-off.

Asked by Percy Panthaki

Appropriate EBITDA Margin Partial
So right now, we are below sectoral average. At least I would want us to get to sectoral averages and then look at further improving from there. But right now, we are at a we are under the sectoral average, and that's something which honestly needs to be addressed first.

While not giving a specific number, management sets a clear directional target to reach sectoral average EBITDA margins as a first step.

Asked by Percy Panthaki

VPC Integration Costs and Timeline Direct
So I think if you look at our total expense lines, which are there, they already have some numbers in factor. I don't think so we will have more than this coming in, but this basically, you can assume a similar trend on cost lines basically for the next couple of quarters as the process goes on.

Provides clarity on the financial impact of VPC integration, suggesting that significant additional integration costs are not expected beyond current levels.

Asked by Dhruv

VPC Acquisition Rationale and Synergies Direct
We have the opportunity to take this company, which is fairly regional in the South to rest of the country and to channels like modern trade and e-commerce and to the export markets, which itself will provide a huge growth potential.

Explains the strategic benefits of the VPC acquisition, including portfolio diversification into a faster-growing segment and leveraging distribution for broader market reach.

Asked by Amit Agicha

New Product Launch Strategy Direct
We will basically try and work in a frugal manner so that we can get good returns in terms of revenue on back of the investments behind advertising and other non-advertising spends, which we make to speed and establish that brand.

Details a cautious, phased approach to new product launches, focusing on specific channels and markets to ensure profitability and good ROI before wider expansion.

Asked by Gaurav Gandhi

3 min read 7 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Bajaj Consumer Care reported consolidated sales of INR 259.5 crores for Q1 FY26, marking a 7.4% year-on-year growth. Stand-alone sales stood at INR 244.5 crores, growing by 3.2% YoY. Excluding Vishal Personal Care, consolidated revenue grew by 3.7%. The company achieved a stand-alone EBITDA of INR 42.8 crores, representing an 11.6% growth, with PAT at INR 39 crores (stand-alone) and INR 37.9 crores (consolidated).

Gross and EBITDA Margin Expansion Drivers

The stand-alone gross margin improved significantly to 56.6%, an increase of 140 basis points year-on-year and 240 basis points sequentially. This expansion was primarily driven by an improved product and SKU mix, coupled with price increases in the oil portfolio. Consequently, the stand-alone EBITDA margin expanded by 130 basis points YoY and 340 basis points sequentially to 17.5%, with consolidated EBITDA margin improving by 30 basis points YoY.

Almond Drop Hair Oil (ADHO) Revival and Strategy

The core brand, Almond Drop Hair Oil (ADHO), showed a 4% growth, successfully arresting its volume decline after several quarters. This growth was broad-based, including small packs and sachets, indicating a broader consumption revival. The company has significantly increased its advertising focus on ADHO, with an extensive TV campaign (over 3,000 GRP) and dedicated digital channel efforts, reaching over 4 crore consumers.

Vishal Personal Care (VPC) Acquisition and Integration

Bajaj Consumer Care completed the acquisition of the remaining 51% stake in Vishal Personal Care (VPC) in Q1 FY26, making it a fully owned subsidiary. VPC reported a top line of INR 15.5 crores in Q1 FY26, growing nearly 10% YoY on a like-to-like basis. The integration process has begun, with management estimating it to be a 4-5 quarter exercise, focusing on leveraging VPC's strong South distribution for BCCL brands and expanding VPC's presence nationally.

Channel Performance and Distribution Strategy

Organized trade, encompassing modern trade and e-commerce, demonstrated strong double-digit growth year-on-year, now contributing close to 29% of sales. Quick commerce and beauty channels led performance within organized trade. Conversely, rural general trade remained sluggish, which management attributed to internal distribution changes under the 'Aarohan' program, currently being rectified. The Aarohan program has been extended across core markets, adding over 25,000 new outlets.

International Business Challenges

The international business experienced a weak quarter, with revenue declining 20% year-on-year. This was primarily due to external headwinds such as tariff uncertainty and a slowdown in rest of world markets. While direct representation markets like Nepal and Bangladesh showed resilient double-digit growth, distributor/export markets (MEA and rest of world) declined sharply due to weak demand and distributor transitions.

Hair Oil Category Outlook and Product Innovation

Management views the hair oil category as a $2 billion market with high penetration (92-93%) and stable usage habits in India. While the category grows at a moderate rate, consumer preferences are evolving towards sensorials. The company aims to premiumize ADHO and explore extensions within the brand, alongside scaling up its herbal natural product portfolio from Banjara's. New product introductions will follow a frugal, phased approach, focusing on specific channels and markets for optimal ROI.

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