Project Aarohan And Digital Channels Will Expand Market Reach

Key Takeaways

• Expansion of distribution networks and diversification into natural personal care aim to broaden market reach and reduce revenue concentration risk.
  
• Emphasis on digital channels, brand investment, and operational agility is expected to improve margins, capture premium trends, and sustain long-term earnings growth.
  
• Heavy reliance on a declining core brand, slow diversification, margin pressures, and external challenges threaten Bajaj's growth, competitiveness, and long-term earnings stability.

Catalysts

Manufactures, markets, distributes, and sells hair care, cosmetics, toiletries, and other personal care products in India and internationally.

• Ongoing expansion and optimization of distribution networks through initiatives like Project Aarohan and integration of recent acquisitions (e.g., VPCL, Banjara's) are expected to broaden market reach-especially in rural and southern markets-supporting top-line growth and geographical diversification of revenues.
  
• Increased focus and investment in modern trade and e-commerce channels, along with targeted digital marketing and influencer campaigns, position Bajaj to capture value from growing urbanization and premiumization trends, leading to higher average selling prices and improved revenue mix.
  
• Revival and renewed brand investment in core products, specifically Almond Drops Hair Oil (ADHO), coupled with stabilization in input costs, are likely to drive margin recovery as improved product and channel mix, selective pricing, and cost optimization take effect, enhancing EBITDA and net margins.
  
• Strategic moves toward portfolio diversification into adjacent natural and herbal personal care categories (leveraging synergies with acquisitions like VPCL/Banjara's) align with increasing consumer demand for health, wellness, and "natural" products, setting up new revenue streams and reducing concentration risk.
  
• Targeted operational agility and selective new product development with capital allocation discipline are intended to boost innovation ROI and support long-term sustainable earnings growth, while maintaining improved EBITDA margins and sector-average profitability.

Bajaj Consumer Care Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Bajaj Consumer Care's revenue will grow by 8.1% annually over the next 3 years.
• Analysts assume that profit margins will increase from 12.8% today to 17.5% in 3 years time.
• Analysts expect earnings to reach ₹2.2 billion (and earnings per share of ₹14.45) by about September 2028, up from ₹1.3 billion today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 24.5x on those 2028 earnings, down from 26.3x today. This future PE is lower than the current PE for the IN Personal Products industry at 58.5x.
• Analysts expect the number of shares outstanding to decline by 2.4% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 14.09%, as per the Simply Wall St company report.

Bajaj Consumer Care Future Earnings Per Share Growth

Risks

• Bajaj Consumer Care remains heavily dependent on its flagship Almond Drops Hair Oil (ADHO) brand, and management acknowledges historic market share erosion and underperformance in this core segment; failure to sustainably revive and defend ADHO could result in prolonged revenue stagnation or decline, driving earnings volatility.
  
• Despite strategic focus and recent acquisitions to expand beyond hair oil, Bajaj has yet to deliver meaningfully successful portfolio diversification-management highlights slow rollout and low store visibility for new products-raising the risk that revenue concentration remains high and limits future topline growth.
  
• Bajaj lags sectoral EBITDA margins, having seen a multi-year decline from ~30% to mid-teens, and while management targets industry averages, this requires a difficult balance between restoring profitability (via price/mix) and reinvesting in advertising and innovation-execution risk here threatens both margin expansion and sustained revenue growth.
  
• The hair oil category itself demonstrates high household penetration and commoditization with low-to-moderate long-term growth prospects and increasing competitive intensity, especially from well-resourced peers and regional brands; this structural limitation constrains Bajaj's organic revenue upside and puts pressure on long-term market share.
  
• Bajaj's international business has experienced significant revenue decline (20% YoY) due to tariff issues and weak demand in key export markets, compounded by the lack of global manufacturing flexibility-continued external headwinds or inability to scale new export geographies exposes Bajaj to geopolitical risk and potential future earnings drag.

Valuation

• The analysts have a consensus price target of ₹283.0 for Bajaj Consumer Care based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of ₹325.0, and the most bearish reporting a price target of just ₹230.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be ₹12.4 billion, earnings will come to ₹2.2 billion, and it would be trading on a PE ratio of 24.5x, assuming you use a discount rate of 14.1%.
• Given the current share price of ₹242.0, the analyst price target of ₹283.0 is 14.5% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.