Bajaj Consumer Care shares jump 10%, but Nuvama sees stock at Rs 165 apiece

Shares of Bajaj Consumer Care climbed over 10 per cent in Thursday's trade on healthy set of quarterly results. But brokerage Nuvama has kept 'Hold' rating on the stock with a target of Rs 165.

Following a 10 per cent jump, the target suggests 9 per cent potential downside on the counter. The scrip hit a high of Rs 181.75, before trading at Rs 175.65, still up 6.75 per cent.

"Softening of refined mustard oil and LLP prices can aid the company’s margin profile. However, intense competition from larger players remains a key concern," the brokerage said.

Bajaj Consumer Care said its revenue for the March quarter grew 11.5 per cent YoY while its Ebitda and PAT were up 13 per cent and 6.8 per cent, respectively. The two prints were ahead of the consensus estimates. Bajaj Consumer Care said its volumes grew 9.9 epr cent in Q4FY23. . EBITDA margin expanded 22 bps YoY and 283 bps sequentially to 17.2 per cent.

The market share of Bajaj Hair oil in value terms remained flat YoY at 10.4 per cent in Q4FY23.

"Along with ADHO, Coconut and Amla Hair oil portfolios continued to perform well. Modern trade and E-Commerce witnessed a robust double-digit growth. International business grew by more than 151 per cent in Q4FY23," Nuvama noted.

Later in the day, the company is expected to come out with a call at 11 am. Nuvama said it would seek clarity on cost inflation. It would want to know how much is that inflation covered by price hike and cost initiatives. Besides, it said it would like to know about the performance of coconut, amla and other new products and the outlook for the same. 

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