Bajaj Consumer Q2 FY27 Earnings Call — Analysis (NSE: BAJAJCON)
Bajaj Consumer Care posted modest Q2 revenue growth of 2.7% YoY to ₹233 Cr while EBITDA margin expanded to 25% via cost efficiencies, alongside announcing a ~5% price/grammage hike in Q3 to counter input inflation.
Result quality: strong — Margin expansion. Management sentiment: optimistic.
The take
Q2FY27 Revenue from Operations ₹233 Cr ( +2.7% YoY ) , H1FY27 +28% . New guidance — FY27 full year revenue growth high teens . New story: Project Aarohan Direct Reach Scaling .
Results
Revenue grew 2.7% YoY to ₹233 Cr with EBITDA margin reaching 25.0% (EBITDA ₹53 Cr) and PAT of ₹70 Cr, supported by cost rationalisation despite gross margin compression to 59.9%.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Revenue from Operations | ₹233 Cr | +2.7% | yoy · Q2FY27 |
| EBITDA | ₹53 Cr | none · Q2FY27 | |
| EBITDA Margin | 25.0% | none · Q2FY27 | |
| PAT | ₹70 Cr | none · Q2FY27 | |
| PAT Margin | 21.0% | none · Q2FY27 | |
| Gross Margin | 59.9% | sequential · Q2FY27 | |
| H1 Revenue from Operations | ₹674 Cr | +28% | yoy · H1FY27 |
| H1 EBITDA | ₹167 Cr | +85% | yoy · H1FY27 |
| H1 PAT | ₹141 Cr | +75% | yoy · H1FY27 |
| H1 Gross Margin | 60.8% | none · H1FY27 |
Guidance
Management expects high-teens revenue growth for the full year and plans an additional ~5% price increase/ml-age reduction in Q3 FY27 to mitigate edible oil inflation.
What management committed to
- [Bajaj Consumer Care] expects to deliver high-teens revenue growth for the full year [FY27]. — high teens, FY27
- [Bajaj Consumer Care] will execute a ~5% consumer price increase in Q3 [FY27], split equally between 2% to 3% frontal price increase and ml-age reductions. — approximately taking a 5% increase, Q3FY27
- [Bajaj Consumer Care] will expand direct reach in urban by 10% and in rural by more than 10% under Project Aarohan 2.0 over the next six quarters. — 10% in urban, and in rural by more than that, Q4FY28
- [Bajaj Consumer Care] aspires to achieve a 75% to 80% index on direct distribution relative to larger peers over the medium term. — 75% to 80% index, over a period of time
Key themes
Direct distribution expansion and margin defense
How the narrative shifted
- Project Aarohan Direct Reach Scaling: Management views direct distribution expansion from 50-60% peer index to 75-80% as the most reliable 2-3% volume growth driver.
- Input Cost Inflation and P&L Protection: Rising edible oil and West Asia war-related RM inflation are being countered via phased pricing, ml-age cuts, and tight non-working overhead management.
- Growth Portfolio Second Engine: Scaling coconut oil, amla, lotions, and Banjara's adjacencies into large mass categories to establish a secondary growth pillar beyond ADHO.
Operational commentary
- Project Aarohan 1.0 completed across 13 states, adding 1 lakh+ outlets and 1,000+ distribution points while closing 600+ van routes to reduce fixed S&D costs; Aarohan 2.0 launched pan-India across 27 states.
- Almond Drops Hair Oil (ADHO) delivered double-digit unit volume growth, driven by small and medium-sized price point packs.
- Implementing a ~5% consumer price realization increase in Q3 FY27, split roughly equally between 2-3% direct price hikes and ml-age/grammage reductions.
- Growth portfolio pilots underway: testing amla oils in general trade, body lotion upgrades for e-commerce, and Banjara's adjacencies (lip balm, color shampoo) in southern states.
- International business sustained recovery across clusters, growing ahead of company average in H1 except for Bangladesh which grew in teens.
- Outsourced production at Guwahati factory from company-owned to third-party facility at the start of the fiscal year to improve operational efficiency.
Analyst Q&A
Q. Whether ADHO strong performance is category-led or internal execution, and what is the breakdown across channels/packs?
Estimated 2-3 percentage points of volume growth came from distribution expansion under Project Aarohan; price point packs contribute under 20% of ADHO value sales, and organized trade accounts for ~30% of company sales.
Q. Will gross margins continue to face pressure and have they bottomed out?
Cost basket visibility remains volatile due to RM price swings, so procurement is kept lean; company will focus on protecting absolute EBITDA pool through pricing and operational savings rather than guiding on percentage gross margins.
Q. Any ongoing M&A developments or pipeline updates?
Stated that the company is not at any deal stage or reporting stage for M&A.
Q. Why did purchases of stock-in-trade increase sharply relative to raw material consumption?
Explained that the Guwahati manufacturing facility was transitioned from company-owned operations to a third-party contract manufacturer at the beginning of the fiscal year.
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