The Business

Bajaj Consumer Care is one of the leading FMCG brand in India. It offers quality hair, beauty and personal care products. As a part of business expansion and high market demand due to COVID-19 pandemic outbreak, the company has entered into the Personal Hygiene segment with a brand new product of hand sanitizer.

The company enjoys high reputation amongst their 60 Million Customers for their products such as Bajaj Almonds Drop Hair Oil, Bajaj Brahmi Amla Hair Oil, Bajaj Jasmine Hair Oil and No Marks Skin Care Range of Products.

The Fundamentals

Let us consider and understand some fundamentals that will help us to decide whether one should Invest or not in this stock.

1. Business Revenue

The company reported an operating income of ₹879 Crore for the Financial Year 2021-2022 which is down by almost 5% with respect to F.Y. 2020-21. Below is the Revenue for past Five Years.

2017-18	2018-19	2019-20	2020-21	2021-22
827 Cr	918 Cr	852 Cr	921 Cr	879 Cr

2. Net Profit

Bajaj Consumer Care reported a Net Profit of ₹169 Crore for the Financial Year 2021-2022 which is down by almost 26% with respect to F.Y. 2020-21. Below is the Net Profit for past Five Years.

2017-18	2018-19	2019-20	2020-21	2021-22
211 Cr	221 Cr	184 Cr	223 Cr	169 Cr

3. EPS, P/E and Sector P/E

The EPS and P/E are important factors for valuation of a stock. BAJAJCON reported an EPS of ₹11.50 for the F.Y. 2021-22 against ₹15.12 for the previous F.Y. Since the EPS has been reduced by almost 24% YoY, the Price / Earnings (P/E) ratio is arrived at 11.96

Considering the sector P/E of 59.88, the stock is available at a low P/E of 11.96 Hence, the stock is available at a fair price around ₹137/share and worth investing in the stock for medium to long term plan.

4. Debt to Equity Ratio

The company is a Debt Free with Debt to Equity Ratio is 0 (ZERO) for the F.Y. 2021-22. It is a good sign of company’s financial strength. Though some debt is acceptable for business growth, I personally like Debt Free Companies.

5. Shareholding Pattern and Pledged Shares

At the quarter ending on 31-Mar-2022, the shareholding is as under:

Promoters	FII	DII	Public
38.04%	17.55%	12.62%	31.79%

The Promoters have not pledged shares during the last 5 Quarters. Apart from this, the FII and DII also have substantially strong holding in the stock.

6. Book Value and P/B Ratio

Book value per share is ₹54.88 and the current market price is ₹137.55. Therefore, the Price to Book Value (P/B) ratio is just 2.51 which is considered as below industry median.

7. Dividend and Dividend Yield

Bajaj Consumer Care regularly declares dividend every year. For the year ending March 2022 the company has declared an equity dividend of 800% amounting to ₹ 8/share. At the current share price of Rs 137.55 this results in a dividend yield of 5.82%.

Such a high dividend yield gives an opportunity to invest in a stock that offers a dividend yield slightly better than Bank FDs and fair chances of capital appreciation.

8. 52 Week High and Low

The stock is currently traded at close to 52W Low of ₹134.80. The 52W High recorded is ₹307.8 and currently the stock is trading at 55.31% away from its 52W High. If someone is looking for bottom fishing, then this is the time to enter in the stock.

9. Volume and Deliveries

Average volume for the stock is around 5 Lakh shares and the deliveries of 40% to 50% This indicates that the stock might be preparing for some movement in near future.

CONCLUSION

Though the technical indicators are weak for this stock, the fundamentals sounds good. Bajaj Consumer Care is Fundamentally Profit making, Dividend Paying, Debt Free and Low P/E Company. With the current stock price and strong fundamentals, the Risk/Reward ratio is quite favorable to take entry in this stock.

I would also recommend to do your own study before investing in any stock.

Happy Investing!