CD Equisearch P Equities Derivatives Commoditie Bajaj Corp. Ltd. No. of shares (m) 147.5 Mkt cap (Rs crs/$m) 5665/885.0 Current price (Rs/$) 384/6.0 Price target (Rs/$) 463/7.2 52 W H/L (Rs.) 450/325 Book Value (Rs/$) 38/0.6 Beta 0.5 Daily volume NSE (avg. monthly) 32260 P/BV (FY18e/19e) 11.7/11.3 P/E (FY18e/19e) 23.0/19.9 EPS growth (FY17/18e/19e) -0.3/5.6/15.8 ROE (FY17/18e/19e) 52.3/52.6/57.7 OPM(FY17/18e/19e) 33.1/32.7/34.1 D/E ratio (FY17/18e/19e) 0.0/0.0/0.0 BSE Code 533229 NSE Code BAJAJCORP Bloomberg BJCOR IN Reuters BACO.BO Shareholding pattern % Promoters 66.9 MFs / Banks / FIs 4.9 Foreign Portfolio Investors 23.7 Govt. holding - Public & others 4.6 Total 100.0 As on June 30, 2017 Recommendation BUY Phone: + 91 (33) 4488 0011 E- mail: [email protected]Figures (Rs crs) Income from operations Other Income EBIDTA (other income included) PAT after EO EPS (Rs.) EPS growth (%) Pvt Ltd es Distributio n of Mutual Funds Dis FY15 FY16 FY17 825.62 799.72 796.90 31.55 28.70 39.39 270.79 302.39 302.98 209.79 233.33 232.66 14.22 15.82 15.77 22.3 11.2 -0.3 Quarterly Highlights • Net sales fell by 3.4% on y-o-y basis to Rs 1 net profit also saw de-growth of 10.5% on y Weak consumer demand- accentuated by volume growth for Bajaj Corp in Q1FY18. I down by 14.5% to Rs 60.64 crores ($9.4m), p of lower sales and subdued operating mar were up by 22.1% on y-o-y basis & other exp • Almond drops hair oil (ADHO) is the seco hair oil segment which is the key produ revenue) saw a drop of 6.6% in volume & compared to same period previous year. W is underway the rural segment is yet to tak couple of quarters. • In FY17 the ratio of Almond Drops market competitor in the LHO market has increased It has retained the first rank in most of the st • On the cost front, in Q1FY18 Bajaj witnesse key raw material) from Rs 43.91/kg in Q1 quarter of current financial year. LLP cost s total raw material and packing cost. Howe almost flat on y-o-y basis at Rs 75.39/kg in Q in Q1FY17. Currently company has restraine term contract for its raw material procurem the international market. • The stock presently trades at 23x FY18e EP EPS of Rs 19.29. Bajaj Corp’s plans to ma network of 3.8 million retail outlets (~2.2 m increase in disposable incomes and co unbranded to branded products by provid value proposition as well as to leverage almonds with nutrition. Its striking market hair oil industry would help avert mark competition. Goaded by higher volumes, e next fiscal. In light of the above, we advise target of Rs 463 (previous target Rs 447) bas 1.5 on FY19 earnings) over a period of 9-12 m August 30, 2017 stribution of Life Insurance FY18e FY19e 856.85 961.92 40.51 43.37 320.49 370.90 245.79 284.55 16.66 19.29 5.6 15.8 197.43 crores ($30.6m), reported y-o-y to Rs 54.98 crores ($8.5m). GST roll out- let to subdued In Q1FY18 operating profit was primarily due to combined effect rgins (-400bps); employees cost penses also went up by 4%. ond largest brand in the overall uct for the company (93.4% of & 2.8% in value, in Q1FY18 as While the urban demand revival ke off, which may take another t share value to the next largest d to 4.6 compared to 4.3 in FY16. tates in the LHO segment. ed a rise in LLP cost (one of the 1FY17 to Rs58.28/kg in the first sums up to almost 27.6% of the ever prices of refined oil were Q1FY18 compared to Rs 75.97/kg ed itself from entering any long ment on account of instability in PS of Rs 16.66 and 19.9x FY19e aneuver its strong distribution million in rural area) to tap the onvert rural consumer from ding them with an appropriate on the strong connotation of share in both almond and light ket disruption from increased earnings growth would revive e buying the stock with revised sed on 24x FY19e earnings (peg months.
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*figures in crores; calculations on ttm basis All ratios adjusted for goodwill and revaluation reserve; sales estimated for Dabur & Emami Emami’s PAT adjusted for amortization and impairment of intangible assets (brand, trade mark etc)
Marico sells over 15.2 crore packs every month through
yurvedic & healthcare offerings. The company’s diverse product portfolio
care, home care, health supplements, digestives, OTC & ethical) and presence in niche categories has aided
y decline in consolidated net sales to Rs 7614 crores ($1134.9m)
OPM expanded by 30bps to 19.8% as compared to 19.5%, in FY16
NewU, a beauty retail venture of Dabur, announced plans of bringing Sri Lankan beauty products brand
India to strengthen their portfolio. Dabur commissioned a new manufacturing facility in Tezpur, Assam in March
the Tezpur factory is the largest production facility for Dabur across
medicines, health supplements, hair oils, shampoos, toothpastes, skin care and home care
. Spread over 30 acres of land, this factory features fully automated processing
lines to optimize supply chain and quality management.
es Zandu, one of the strongest ayurvedic brands. Over 80 per cent of business comes from wellness
categories. Emami has increased focus on OTC products, concentrating on advertising, distribution & product launches. These
. The impact of demonetization persists and demands still not back to normal levels
Emami reported a growth of 5.7% in net sales to Rs 2493 crores ($371.6m), in FY17. It has strong innovativ
portfolio. Management has been focusing on increasing it direct reach from 7 lakhs to 8 lakhs
direct outlets. New unit at Pacharia, Guwahati commenced operations in Feb17. Spread over 30 acres of land, this is the large
uilt with a total outlay of Rs 300 crores ($44.7m). It has also launched a new variant of
oily, deep moisturizing cream) with the goodness of ayurvedic herbs and antiseptic
wdown in Middle East countries impacted the overall performance of i
. International business reported de-growth of 38% during the last quarter and 16% in FY17
8
CD Equisearch Pvt Ltd
istribution of Life Insurance
Amla, Fem, Honey, Meswak, Dabur Red)
any’s diverse product portfolio (hair care, oral care, skin
n niche categories has aided revenue growth. In
s ($1134.9m) on the backdrop of
as compared to 19.5%, in FY16. In January 2017,
NewU, a beauty retail venture of Dabur, announced plans of bringing Sri Lankan beauty products brand - Spice Island, to
ility in Tezpur, Assam in March17. Set up
largest production facility for Dabur across the globe.
pastes, skin care and home care
ures fully automated processing lines
yurvedic brands. Over 80 per cent of business comes from wellness
categories. Emami has increased focus on OTC products, concentrating on advertising, distribution & product launches. These
demonetization persists and demands still not back to normal levels.
has strong innovative pipeline focusing
portfolio. Management has been focusing on increasing it direct reach from 7 lakhs to 8 lakhs
direct outlets. New unit at Pacharia, Guwahati commenced operations in Feb17. Spread over 30 acres of land, this is the largest
. It has also launched a new variant of
oily, deep moisturizing cream) with the goodness of ayurvedic herbs and antiseptic
l performance of international
he last quarter and 16% in FY17.
CD Equisearch Pvt Ltd
Equities Derivatives Commoditie
Financials
Quarterly Results- Standalone
Income From Operations
Other Income
Total Income
Total Expenditure
EBITDA
Interest
Depreciation
Exceptional Item
Adjusted Net Profit
EPS(Rs)
Income Statement- Consolidated
Income From Operations
Other Income
Total Expenditure
EBITDA (other income included)
Interest*
Depreciation
Exceptional Item
*Interest includes bank charges **Figures for FY15 not IND-AS compliant.
9
CD Equisearch Pvt Ltd
ities Distribution of Mutual Funds Dist
Q1FY18 Q1FY17 % chg FY17 FY16
197.43 204.31 -3.4 792.54 795.86
11.06 8.36 32.2 39.35 28.78
Total Income 208.49 212.68 -2.0 831.89 824.64
Total Expenditure 136.79 133.36 2.6 526.93 521.43
EBITDA 71.70 79.32 -9.6 304.95 303.20
0.26 0.20 27.4 0.93 0.21
1.54 12.76 -87.9 23.15 51.30
PBT 69.90 66.36 5.3 280.87 251.70
Tax 14.92 14.16 5.3 59.92 53.71
PAT 54.98 52.20 5.3 220.96 197.99
Exceptional Item - -9.24 -100.0 -14.46 -36.95
Adjusted Net Profit 54.98 61.43 -10.5 235.42 234.94
EPS(Rs) 3.73 4.17 -10.5 15.96 15.93
Consolidated FY15** FY16 FY17 FY18e
825.62 799.72 796.90 856.85
31.55 28.70 39.39 40.51
Total Income 857.17 828.42 836.29 897.36
Total Expenditure 586.38 526.03 533.31 576.87
EBITDA (other income included) 270.79 302.39 302.98 320.49
0.13 0.23 1.03 1.29
51.85 51.88 23.70 6.09
PBT 218.81 250.28 278.25 313.11
Tax 46.15 53.85 60.01 67.32
PAT 172.66 196.43 218.24 245.79
Exceptional Item -37.13 -36.90 -14.42 -
Net Profit 209.79 233.33 232.66 245.79
EPS(Rs) 14.22 15.82 15.77 16.66
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istribution of Life Insurance
Figures in crores
FY16 % chg
795.86 -0.4
28.78 36.7
824.64 0.9
521.43 1.1
303.20 0.6
0.21 345.8
51.30 -54.9
251.70 11.6
53.71 11.6
197.99 11.6
36.95 -60.9
234.94 0.2
15.93 0.2
Consolidated Figure in crores FY18e FY19e
856.85 961.92
40.51 43.37
897.36 1005.29
576.87 634.38
320.49 370.90
1.29 1.45
6.09 6.97
313.11 362.48
67.32 77.93
245.79 284.55
-
245.79 284.55
16.66 19.29
CD Equisearch Pvt Ltd
Equities Derivatives Commoditie
Consolidated Balance Sheet
Sources of Funds
Share Capital
Reserves
Total Shareholders' Funds
Minority Interest
Long Term Debt
Total Liabilities
Application of Funds
Gross Block
Less: Accumulated Depreciation
Net Block
Capital Work in Progress
Investments
Current Assets, Loans & Advances
Inventory
Trade Receivables
Cash and Bank
Other Current Assets
Total CA & LA
Current Liabilities
Provision- Short Term
Total Current Liabilities
Net Current Assets
Net Deferred Tax
Net long term assets(Loans & advances)
Total Assets
*Figures for FY15 not IND-AS compliant
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CD Equisearch Pvt Ltd
ities Distribution of Mutual Funds Dist
Figure in crores FY15* FY16 FY17 FY18e FY19e
14.75 14.75 14.75 14.75 14.75
473.81 466.31 479.44 512.19 530.44
488.56 481.06 494.19 526.94 545.19
- - - - -
- - - - -
488.56 481.06 494.19 526.94 545.19
278.87 191.18 237.01 251.28 276.18
94.19 51.86 75.45 81.54 88.51
184.68 139.31 161.55 169.74 187.67
0.74 0.85 0.03 0.75 0.85
183.66 275.06 338.54 372.40 378.39
39.27 50.19 42.48 45.46 48.64
13.26 25.35 27.43 28.80 30.24
134.18 60.28 12.43 7.59 6.03
11.45 4.27 4.99 4.09 4.09
198.17 140.10 87.33 85.94 89.00
78.81 84.42 94.34 102.97 111.79
- - 0.24 0.24 0.24
78.81 84.42 94.58 103.21 112.03
119.36 55.68 -7.25 -17.27 -23.03
-0.55 -0.75 -0.77 -0.77 -0.77
0.67 10.90 2.08 2.08 2.08
488.56 481.06 494.19 526.94 545.19
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CD Equisearch Pvt Ltd
istribution of Life Insurance
CD Equisearch Pvt Ltd
Equities Derivatives Commoditie
Key Financial Ratios
Growth Ratios (%)
Revenue
EBITDA
Net Profit
EPS
Margins (%)
Operating Profit Margin
Gross profit Margin
Net Profit Margin
Return (%)
ROCE
ROE
Valuations
Market Cap/ Sales
EV/EBITDA
P/E
P/BV
Other Ratios
Interest Coverage
Debt Equity
Current Ratio
Turnover Ratios
Fixed Asset Turnover
Total Asset Turnover
Debtors Turnover
Inventory Turnover
Creditor Turnover
WC Ratios
Debtor Days
Inventory Days
Creditor Days
Cash Conversion Cycle
*Revenue growth for FY16 at 6.2% as per IGAAP
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CD Equisearch Pvt Ltd
ities Distribution of Mutual Funds Dist
FY15 FY16 FY17 FY18e FY19e
22.9 -3.1* -0.4 7.5 12.3
19.8 11.6 0.2 5.8 15.7
22.3 11.2 -0.3 5.6 15.8
22.3 11.2 -0.3 5.6 15.8
29.0 34.2 33.1 32.7 34.1
32.8 37.8 37.9 37.3 38.4
25.4 29.2 29.2 28.7 29.6
45.5 52.2 51.1 50.9 55.5
45.5 52.8 52.3 52.6 57.7
8.2 7.1 7.3 6.6 5.9
23.8 17.8 18.1 16.6 14.4
32.2 24.4 25.0 23.0 19.9
15.2 13.0 12.9 11.7 11.3
1971.3 1314.3 288.3 244.2 251.0
0.0 0.0 0.0 0.0 0.0
4.8 4.9 4.5 4.4 4.2
4.9 6.7 7.4 7.0 7.1
1.8 1.8 1.8 1.8 2.0
76.3 41.4 30.2 30.5 32.6
14.9 11.8 11.5 13.1 13.5
12.7 11.1 12.7 13.9 14.4
4.8 8.8 12.1 12.0 11.2
24.5 31.0 31.7 27.8 27.1
28.6 32.9 28.7 26.2 25.3
0.7 6.9 15.1 13.6 13.0
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CD Equisearch Pvt Ltd
istribution of Life Insurance
CD Equisearch Pvt Ltd
Equities Derivatives Commoditie
Cumulative Financial Data FY14-15 FY16-17
Volumes (cases in lakhs) 99 107
Income from operations 1497 1597
Operating profit 425 537
EBIT 488 595
PBT 482 594
PAT 381 466
Dividends 316 408
OPM (%) 28.4 33.7
NPM (%) 25.5 29.2
ROE (%) 43.1 52.0
ROCE (%) 43.6 51.2
Debt Equity* 0.0 0.0
Fixed asset turnover 6.8 6.1
Debtors turnover 64.4 39.2
Inventory turnover 14.3 13.0
Creditors turnover 10.6 11.6
Debtor days 5.7 9.3
Inventory days 25.6 28.2
Creditor days 34.3 31.6
Cash conversion -3.1 5.9
Dividend payout ratio (%) 98.2 98.5 FY14-15 implies two years ending fiscal 15; FY14-15 cumulative data not IND*as at terminal year
Reflecting lag effect of demonetization and destocking ahead of GST implementation early this fiscal, Bajaj Corps hair oil
volumes would grow by 3.7% in FY18-19e period, a perceptible marked down from 8.1% in FY16
next fiscal- volume growth estimated at 6%-
table). A 2.5x increase in debtors increase in debtors from FY13 to FY17
capex coupled with revenue surge explain increase in fixed asset
above).
The company has a good number of products in the pipeline waiting to be launched and the domestic p
promising. Proper cash management has enable the compa
to fluctuation in prices of key raw materials like LLP and refined oil.
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CD Equisearch Pvt Ltd
ities Distribution of Mutual Funds Dist
17 FY18-19e
111
1819
608
678
676
530
479
33.4
29.2
55.6
53.7
0.0
6.9
31.5
13.3
14.2
11.6
27.5
25.8
13.3
90.4
15 cumulative data not IND-AS compliant.
destocking ahead of GST implementation early this fiscal, Bajaj Corps hair oil
19e period, a perceptible marked down from 8.1% in FY16-17 period.
would help contain dramatic erosion in OPM- 33.4% vs 33.7% in FY16
ase in debtors from FY13 to FY17 justifies the drastic drop in debtors’ turnover. Subdued
capex coupled with revenue surge explain increase in fixed asset turnover to 6.9 in FY18-19e from 6.1 in FY16
The company has a good number of products in the pipeline waiting to be launched and the domestic p
enable the company to remain net cash positive. Yet margins would be held hostage
to fluctuation in prices of key raw materials like LLP and refined oil.
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CD Equisearch Pvt Ltd
istribution of Life Insurance
destocking ahead of GST implementation early this fiscal, Bajaj Corps hair oil
17 period. Vigorous recovery
33.4% vs 33.7% in FY16-17 (see
op in debtors’ turnover. Subdued
from 6.1 in FY16-17 (see table
The company has a good number of products in the pipeline waiting to be launched and the domestic product also looks
Yet margins would be held hostage
CD Equisearch Pvt Ltd
Equities Derivatives Commoditie
Financial Summary – US dollar denominated FY15 FY16
Equity capital 2.4 2.2
Shareholders' funds 71.2 66.0
Total debt 0.0 1.5
Net fixed assets (inc CWIP) 22.8 14.6
Investments 29.3 41.5
Net current assets 19.1 8.4
Total assets 71.2 66.0
Revenues 135.0 122.2
EBITDA 44.3 46.2
PBDT 44.3 46.1
PBT 43.5 45.4
Net Profit 34.3 35.6
EPS ($) 0.23 0.24
Book Value ($) 0.48 0.45
Income statement figures translated at average rates; balance sheet at year end rates; projec*All dollar denominated figures are adjusted for extraordinary
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CD Equisearch Pvt Ltd
ities Distribution of Mutual Funds Dist
US dollar denominated FY17 FY18e FY19e
2.3 2.3 2.3
69.6 75.6 78.3
2.3 3.1 3.9
18.3 19.9 22.7
52.2 58.2 59.1
-1.1 -2.7 -3.6
69.6 75.6 78.4
118.8 133.8 150.3
45.2 50.1 57.9
45.0 49.9 57.7
44.2 48.9 56.6
34.7 38.4 44.4
0.24 0.26 0.30
0.47 0.51 0.53
figures translated at average rates; balance sheet at year end rates; projections at current rates (Rs 64.02*All dollar denominated figures are adjusted for extraordinary items; book value adjusted for goodwill.
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CD Equisearch Pvt Ltd
istribution of Life Insurance
tions at current rates (Rs 64.02/$)
CD Equisearch Pvt Ltd
Equities Derivatives Commoditie
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