Watchlist #8- Bajaj Consumer Care
- 5 minutes ago
- 3 min read
With Watchlist we pen down our broader thoughts on an idea that looks interesting and is worth keeping in one’s watchlist. This week’s idea is Bajaj Consumer Care.Bajaj Consumer is known for its Bajaj Almond Drop Hair Oil. It is the leader in light hair oils category with >60% market share.
The last decade was a no growth period for the company due to its reliance on a single product of Almond Oils and overall saturated market in this product. However, post covid, company has been undertaking multiple initiatives around diversification of its product portfolio wherein;
Expanded into coconut hair oil which is the largest segment within the hair oils industry.
Leveraged its Almond Drops brand equity to launch adjacent products in the skin & hair care category like body lotion, shampoo etc
Launched newer brands like Bajaj 100% Pure, Natyv Soul and an ethnic products range.
This product portfolio diversification initiatives were backed by new management wherein the company hired Mr. Jaideep Nandi (external hire) from Asian Paints in 2020.
During Mr. Nandi’s tenure, the new products share in overall revenues increased from nothing to ~25% as of FY25 end.
Post Mr. Nandi’s tenure ending in 2025, company hired Mr. Naveen Pandey in July’25. Mr. Naveen Pandey is ex-Marico wherein he was earlier MD of Marico’s Bangladesh operation and was also India sales head earlier.
The reason why Bajaj looks interesting is because after years of no growth the company seems to be getting back to growth. In recent quarters the growth rates have improved from low single digit to high single digits, then teens and in the most recent quarter a strong 30% growth.
Along with improved headline growth rates, there is large margin expansion potential as well. When Bajaj was a single product business, it was a highly profitable one with ~30% operating margins and used to throw large cash every year.
But post covid, the margins nearly halved due to investments in new products and inflationary pressures in core ADHO business.
Now with overall improved growth rates and some of the new product categories achieving a certain scale, there is potential for margin improvement as well.
Lastly, cash is another growth trigger here. Bajaj due to its large cash generation always has had large cash reserves which it never used. Now it has started using that cash wherein last year it acquired Vishal Personal Care for ~Rs120 crores. Vishal operates a South India based hair & skin care brand- Banjara’s with revenues of ~Rs50 crores in FY24.
Buybacks are also something that the company has been doing at regular intervals wherein between 2023-2025, it has bought back shares worth ~Rs450 crores. In the most recent buyback in Sep’25, the company bought back ~4.7% of its outstanding shares.
In summary, Bajaj has gone from single product company with no growth to now with clear focus on growth wherein we have clear visible factors driving this change- product portfolio diversification, new management and use of large cash balance. If company is able to sustain growth rates at high double digits and improve margins, then Bajaj could turn out to be very good investment as it is priced reasonably at ~30x its TTM earnings.
That’s all for this one; we’ll be back with a new idea next week. Meanwhile readers can access some of our more detailed research and resources here;
Shared Research 🔗- https://www.surgecapital.in/sharedresearch
Knowledge Base 🔗- https://www.surgecapital.in/knowledge-base