Bajaj Consumer slides 9% on disappointing December quarter results

Shares of Bajaj Consumer Care tumbled 9 per cent to Rs 201 on the BSE on Tuesday after the company's standalone net profit in December 2019 quarter declined 16.66 per cent on year-on-year (YoY) basis to Rs 50.08 crore, due to lower operational revenue. It had posted a net profit of Rs 60.09 crore in the October-December quarter a year ago.

The fast moving consumer goods (FMCG) firm's operational revenues during the quarter fell 7.8 per cent to Rs 211 crore as against Rs 229 crore in the corresponding quarter a year ago.

On the operational front, the company's earnings before interest, tax, depreciation, and ammortisation (Ebitda) fell 23.7 per cent to Rs 55.7 crore while margin declined to 27.1 per cent from 32.61 per cent YoY.

At 9:50 AM, the stock was trading 7.63 per cent lower at Rs 204.5 as compared to 1 per cent gain in the benchmark S&P BSE Sensex. Nearly 5.3 lakh shares have changed hands on the BSE and NSE so far.

Bajaj Consumer Care jumps 20% after promoters sell 22% stake

Shares of  Bajaj Consumer Care surged 20 per cent to Rs 235, erasing its entire previous day’s fall of 15 per cent, on the BSE on Wednesday after Mutual Funds-led institutional investors bought more than 20 per cent stake from the promoters of the personal products company.

On Tuesday, Shishir-Kushagra Bajaj family, the promoters of Bajaj Consumer Care, sold nearly 22 per cent of their stake in the company for Rs 627 crore to pay-off debt and remove the pledge on stake from the banks.

Bajaj Resources sold 32.26 million equity shares, representing 21.87 per cent stake, in Bajaj Consumer at price of Rs 194.56 per share on the BSE, bulk deal data shows.

HDFC Mutual Fund bought 5.25 per cent stake in Bajaj Consumer, followed by ICICI Prudential Mutual Fund (2.52 per cent) and Aditya Birla Sun Life Mutual Fund (1.76 per cent). Natwest Bank PLC, as trustee of Jupiter India Fund, Steinberg India Emerging Opportunities Fund and ICG Q from the foreign portfolio investors have purchased between 1-2 per cent stakes in the company from open market.

On Tuesday, shares of Bajaj Consumer hit an intra-day low of Rs 193, its lowest level since November 2012.

Previously on March 12, 2019, Bajaj Resources had offloaded 10.1 million shares, representing 6.85 per cent stake, in Bajaj Consumer Care for Rs 320 crore.

The promoter sold shares at the price of Rs 316.42 per share on the BSE.

In the past two trading days, the stock has tanked 19 per cent after it reported a disappointing set of numbers for the quarter ended September 2019. In comparison, the S&P BSE Sensex gained 1 per cent till Tuesday.

Bajaj Consumer tanks 16% in two days post Q2 results, hits over 4-year low

Shares of  Bajaj Consumer Care hit an over four-year low, down11 per cent to Rs 204 on the BSE on Tuesday. The stock has slipped 16 per cent in two days after reporting a disappointing set of numbers for September quarter (Q2FY20). Shares of the personal products company was trading at its lowest level since February 2014.

Bajaj Consumer’s consolidated operational revenue during the quarter grew in single digits - 2.5 per cent at Rs 220 crore due to demand weakness. It had posted revenue of Rs 215 crore in the year-ago quarter. Net profit was up 11 per cent year on year (YoY) to Rs 56 crore, due to lower tax outgo. EBITDA (earnings before interest, tax, depreciation and amortisation) margin expanded around 20 basis points (bps) YoY to 28.6 per cent.

Meanwhile, promoters of the company, who had pledged nearly 60.72 per cent of their stake to lenders as on June 2019, have now increased their pledging. The company's September quarter shareholding pattern reveals that 62.83 per cent of total promoters holding were pledged.

Bajaj Consumer is looking to address key concerns on high single category concentration, high revenue dependence on single brand, with the help from Bain & Company, to further improve hair oil category performance and promoter pledge.

“Under Project Vistaar (test marketing in states which contributes around 7 per cent of sales), the company has achieved a 14 per cent YoY growth in primary sales and 19 per cent in secondary sales, which is encouraging. However, we have lowered our topline estimates by 3-4 per cent due to continued rural weakness, and after fine tuning our cost assumptions, our earnings estimates are down 2- 4 per cent for FY20-22e,” analysts at SBICAP Securities said in a result review.

In the past three months, the stock has underperformed the market by falling 36 per cent, as compared to a per cent decline in the S&P BSE Sensex.