Bajaj Consumer care hosted a conference call on Feb 3, 2022. In the conference call the company was represented by Mr. Jaideep Nandi – Managing Director, Mr. Dilip Kumar Maloo – Chief Financial Officer and Mr. Kushal Maheshwari – Head Treasury and IR.

Key takeaways of the call

The company is expanding its hair oils portfolio in addition to launching two premium digital first brands across hair and skin care range.

In Q3 FY22, Hair Oil Market Growth continued to be subdued. Urban markets volume degrew by 1.7% and rural markets degrew by 2.3% on YoY basis. Sharp decline in rural was impacted by inflationary pressure.

Q3 FY22 sales declined by 7.2% on a high base of 18% growth last year with sales of Rs 225.3 crore.

Company's gross margins were impacted despite of taking price increases. Wholesale remained under stress due to impact of rural.

General trade witnessed Clear slow down in demand coupled with downtrading being observed in rural, especially in key Hindi Speaking Markets.

Under modern trade, company witnessed Better offtake and footfalls in Diwali events across most chains. Company recorded 16% Growth in B2C chains in Q3 FY22 and 19% in 9M FY22 on YoY basis.

Continuous focus on the channel and improvement in digital marketing footprint continues to drive growth in E-commerce channels. Company recorded 45% Growth in e-commerce in Q3 FY22 and 95% in 9M FY22 on YoY basis.

In Q3 FY22, General trade contributed 83.7% of total revenue, organized trade 13.9% and International business 2.4%.

For 9M FY22, General trade contributed 83.7% of total revenue, organized trade 13.5% and International business 2.8%.

Nepal and Bangladesh continued to do well growing at high double digits.

The cost of RMO (Refined Mustard Oil) for the quarter has increased by 54% in Q3 FY22 and by 47% in 9M FY22 over same period last year. Company expects some softening in prices in Q4. Prices are at multi year high due to increase in other edible oils prices as well as limited availability of mustard crop.

Light Liquid Paraffin (LLP) prices have started moving up in Q3 FY22 which is around 6% higher over Q2 FY22. The cost of LLP for the quarter has increased by 27% in Q3 FY22 and by 38% in 9M FY22 over same period last year.

Company launched 8 new Hair Care products in Q3 FY22, more products are under Pipeline which are expected to launch in upcoming quarters.

Bajaj Amla Aloe Vera has made steady progress with share in Amla Category standing at 3%. Company is also witnessing Good repeats sales in Coconut Portfolio.

Amla category sales growth was 27% in Q3 FY22 and 40% in 9M FY22 on YoY basis.

In Q3 FY22, urban contributed 50% of total primary sales and rural contributed 50%.

Company expects 20% plus EBITDA margin from FY24.