Bajaj Corp’s Q2 Profit Up 24.96%, Misses Street Estimates

Bajaj Corp is one of India's leading FMCG companies with major brands in the Hair Care category. It has posted lower-than-expected quarter results in September 2015 due to weakening rural demand.

The company posted a net profit of Rs 46.78 crore, up 24.96%, against Rs 37.44 crore in the corresponding quarter a year ago. The net profit of the company fell 1.55% on quarter on quarter basis.

Net sales during the quarter went up by 10.68 per cent to Rs 207.64 crore as against Rs 187.60 crore in the corresponding period last year.

This is the third straight quarter of decelerating volume growth down from 23% in the March quarter to 8.34% in the September quarter, mainly due to weak demand in rural India.

Lower advertisement spending helped margins jump by 340bps to 31.67% in September 2015, but it could have pulled down Bajaj Corp's volumes. Bajaj Almond Drops grown by around 6.5%, which is lower than what has been over the last two or three quarters. The company expects real recovery in volumes to come in Q4FY16.

Sales for the half year ending September 2015 has increased by 12.50% value wise and 10.23% volume wise.

Its biggest hair oil brand, Bajaj Almond Drops, managed to keep its volume market share at 58.9% in the light hair oils segment, for FY16's five months ending August. In contrast, smallers peers saw a decline in volumes. The Company aims for a market share of 65% by the end of the year 2015-16.

In 2013, Bajaj Corp acquired Nomarks brands from Ozone Ayurvedics for Rs 140.94 crore to strengthen its position in the personal care segment.

The stock fell by 4.5% on Wednesday to Rs 443 after declaring its result. The stock is currently trading at Rs 440.85, down by Rs 2.00 or 0.45% on the BSE.