Bajaj Consumer Care (BAJAJCON) Q4 15/16 earnings summary

Executive summary

• FY16 sales reached ₹86,657 lakh, up 5.74% YoY; PAT rose 14.19% to ₹19,790.52 lakh, supported by lower material costs and improved operating margins.

• Bajaj Almond Drops and Nomarks maintained leading positions in their respective niches, while weak rural demand and down-trading constrained category growth.

Financial highlights

• Revenue from operations was ₹86,876.52 lakh and total revenue ₹89,744.21 lakh, versus ₹82,129.27 lakh and ₹85,284.30 lakh, respectively, in FY15.

• Adjusted EBITDA, before interest, depreciation, brand amortization and tax, increased 14.75% to ₹27,854 lakh; PAT rose from ₹17,331 lakh to ₹19,791 lakh.

• PBT before exceptional items rose 12.13% to ₹29,857.57 lakh; ₹4,698 lakh of trademark and intellectual-property amortization left reported PBT at ₹25,159.57 lakh.

• Material cost consumed fell 5.76% to ₹29,719.30 lakh, while employee cost rose 20.45% to ₹4,582.61 lakh and advertising and sales promotion expense rose 7.40% to ₹15,588.16 lakh.

Outlook and guidance

• Management expected rural demand to recover with a normal 2016 monsoon; higher Nomarks sell-through was expected to convert into turnover growth in the coming year as excess trade inventory cleared.

• Priorities included product innovation, business-process automation, stronger distribution and profitable, sustainable growth; no specific FY17 company revenue or earnings target was stated.

• Management projected Indian economic growth of 7.6% for FY17 and crude oil in a $35–$50/barrel range, barring geopolitical uncertainty.