Académique Documents
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October 2016
Industry Overview
Hair Care
Rs. 19,064 cr
Shampoo
Rs. 5,678 cr
(30%)*
Perfumed Oil
Rs. 6,411 cr
(34%)*
7% CONTRIBUTION
Hair Conditioners
Rs. 461 cr
(2%)*
Hair Dyes
Rs. 3,038 cr
(16%)*
Amla
based Oils
(15%)**
Cooling Oils
(9%) **
Others
(25%)**
251
253
10,000
150
100
50
7,867
8,000
127
6,000
9,886
6,981
4,498
5,044
5,728
4,923
4,000
0
08-09
09-10
10-11
11-12
12-13
13-14
14-15
15-16
16-17
YTD Sep
08-09
09-10
35.0
30.0
30.0
31.9
31.0
13-14
1,474
14-15
15-16
16-17
YTD Sep
15.0
10.0
5.0
1,000
800
1,602
1,080
1,200
16.2
1,503
1,311
1,400
22.4
(Rs. Cr.)
19.9
12-13
1,600
H1-O-H1 0.2%
18.4
11-12
1,800
32.3
26.8
25.0
10-11
9,278
2,000
20.0
8,676
H1-O-H1 2.3%
214
247
610
710
H1-O-H1 1.2%
200
197
238
H1-O-H1 - 0.9%
250
236
269
(Rs. Cr.)
300
831
600
400
802
200
0.0
0
16-17
08-09 09-10
YTD Sep
Source: AC Nielsen Retail Audit Report, Sept 2016; LHO nos. adjusted from 15-16 for like to like comparison
08-09
09-10
10-11
11-12
12-13
13-14
14-15
15-16
10-11
11-12
12-13
13-14
14-15
15-16
16-17
YTD Sep
Hair Oils category is declining slightly as compared to H1 FY16. LHO segment shows slight value growth.
3
30.0
1,080
1,200
15.0
10.0
5.0
16.2
1,000
800
1,602
610
710
831
H1-O-H1 1.2%
22.4
1,503
1,311
1,400
(Rs. Cr.)
18.4
19.9
1,474
1,600
26.8
25.0
20.0
31.0
1,800
32.3
H1-O-H1 0.2%
30.0
31.9
600
400
200
802
0.0
08-09
09-10
10-11
11-12
12-13
13-14
14-15
15-16
08-09
16-17
YTD Sep
09-10
10-11
11-12
12-13
13-14
14-15
15-16
16-17
YTD Sep
17.9
18.7
13.9
8.1
08-09
9.6
09-10
11.0
10-11
11-12
1,000
12-13
13-14
14-15
15-16
861
16-17
YTD Sep
594
600
400
964
746
800
9.3
897
H1-O-H1 -0.3%
16.3
18.1
(Rs. Cr.)
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
H1-O-H1 -1.5%
1,200
284
360
441
200
480
0
08-09
09-10
10-11
11-12
Source: AC Nielsen Retail Audit Report, Sept 2016; LHO nos. adjusted from 15-16 for like to like comparison
12-13
13-14
14-15
15-16
16-17
YTD Sep
Market Shares Trends in Light Hair Oil Category (All India Urban Plus Rural)
Volume MS
Value MS
70.0%
70%
60.0%
50.0%
48.0% 49.1%
51.9%
54.4%
60%
51%
50%
44.1%
40.0%
40%
30.0%
30%
20.0%
20%
10.0%
10%
0.0%
0%
08-09
09-10
10-11
11-12
12-13
13-14
14-15
15-16
16-17
YTD Sep
53%
55%
57%
58%
60%
60%
59.9%
47%
Market Share in the Light Hair Oil Category, LHO nos. adjusted from 15-16 for like to like comparison.
Source: AC Nielsen Retail Audit Report, Sept 2016
Market Shares Trends in Total Hair Oil Category (All India Urban Plus Rural)
Volume MS
Value MS
8.0%
7.1%
7.0%
6.6%
7.4%
7.3%
12.0%
6.7%
9.5%
10.0%
5.8%
6.0%
5.0%
4.5%
9.9%
9.7%
9.7%
9.7%
13-14
14-15
15-16
16-17
YTD Sep
8.5%
7.7%
8.0%
4.7%
7.1%
6.3%
4.1%
4.0%
6.0%
3.0%
4.0%
2.0%
2.0%
1.0%
0.0%
0.0%
08-09
09-10
10-11
11-12
12-13
13-14
14-15
15-16
16-17
YTD Sep
08-09
09-10
10-11
11-12
12-13
Relative MS Value
5.0
4.3
4.5
4.0
4.2
4.3
14-15
15-16
4.5
4.0
3.5
3.2
3.0
2.5
3.4
2.7
2.1
2.0
1.5
1.0
0.5
0.0
08-09
09-10
10-11
11-12
12-13
13-14
16-17 YTD
Sep
Source: AC Nielsen Retail Audit Report, Sept 2016; LHO nos. adjusted from 15-16 for like to like comparison
States
Relative Market
Share
Rank
States
Delhi
Rajasthan
Punjab
3.7
1.6
3.2
1
1
1
North East
Orissa
WB
2.2
6.5
HP-JK
3.6
4.4
EZ
Maharashtra
5.5
4.5
2.9
3.7
Mumbai
Gujarat
3.2
2.0
6.9
3.3
WZ
4.0
3.8
1
1
AP
Karnataka
Kerala
3.2
1.3
5.0
1.3
TN
SZ
1.0
1.9
Bihar
4.6
10.2
Jharkhand
7.5
All India
4.5
Haryana
NZ
Madhya Pradesh
Chhattisgarh
UP
Uttaranchal
CZ
Assam
2.6
Relative Market share is the ratio of Almond Drops market share value to the next largest competitor in LHO segment
Rank is the position of ADHO in respective state
Source AC Nielsen Retail Audit Report, Sept 16
Rank
1
1
1
1
1
1
1
1
1
All India
Delhi
Raj
Punjab
Har
HP-JK
MP
Chattisgarh
UP
Uttar
Assam
Bihar
JharKhand
North East
Orissa
WB
Guj
Maha
AP
Kar
Kerala
TN
LHO Volume
Saliency
100.0%
6.1%
6.0%
4.0%
6.4%
0.5%
10.0%
3.6%
25.1%
1.1%
3.1%
8.0%
1.6%
1.4%
1.9%
7.2%
4.1%
7.1%
1.1%
1.2%
0.1%
0.3%
Rural
43
0
47
31
24
57
49
58
57
45
61
55
44
42
46
42
32
27
12
25
14
1
Urban
54.5
54.3
51.1
52.7
55.2
47.2
56.0
62.8
58.2
52.5
59.7
72.4
67.1
37.9
61.9
39.9
49.2
58.4
51.2
63.6
31.2
36.5
Rural
60.7
42.3
59.2
71.2
52.9
57.5
76.9
62.5
66.3
70.4
83.2
72.4
44.6
75.6
47.1
62.4
57.4
42.8
72.5
19.8
4.3
9
Source: AC Nielsen Retail Audit Report, Sept 16
8%
Urban dominated
segment due to its
relatively higher
pricing
39%
61%
6%
Grocers dominate
distribution
78%
AI Urban
AI Rural
Modern Trade
Pan Plus
Chemists
Cosmetics
Grocers
10%
11%
32%
23%
25%
Sales tend to be
concentrated in
the Central part of
the country
24%
36%
36%
0-15 ml
16-50 ml
51-100 ml
>100 ml
NZ
CZ
EZ
WZ
SZ
Company Overview
Haircare Portfolio
Skincare Portfolio
Bajaj Nomarks Creams for
Normal Skin, Oily Skin & Dry Skin Types, available in
sizes 12g(Normal skin) & 25g
47%
51%
53%
55%
57%
60%
58%
60%
59.9%
40%
30%
20%
10%
0%
08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17
YTD Sep
Comparative Price of Different Brands for 100 ml in the Hair Oil Segment
Competitor Brands
70
60
60
50
45
42
40
30
66
60
50
56
42
30
[VALUE]
20
10
0
Amla Hair Brahmi Amla
Oil
Almond
Drops
Kailash
Parbat
Parachute
Navratna
Almond Drops has created a unique positioning for itself through initiatives like product differentiation
(Almond based), focused marketing, unique packaging (glass vs. plastic used by competition etc.)
14
Gender
Male- 43%
Female- 57%
Age Group
25 to 35 yrs ( 58% of users)
Distribution Structure
The company reaches
consumers through 3.6mn
retail outlets serviced by
7751 distributors (including
MT stockists) and 13818
wholesalers
Factory (8)
OWN Himachal Pradesh -2, Uttarakhand- 1
THIRD PARTY - Himachal Pradesh-2, Bangladesh-1, Uttarakhand- 2
Urban Distribution
Redistribution Stockist
1,590
Rural Distribution
Sub-Stockist 5940
Retail Outlets 1470185
Retail Outlets - 2196733
16
Over the years, BCL has created a large distribution network (that continues to grow) which can be
leveraged to introduce new products
Van Operations
Started in FY 13 with a objective of increasing Rural Sales
Piloted 39 Vans in Q4 FY 13
Organization Structure
Chairman
Mr. Kushagra Nayan Bajaj
Managing Director
Mr. Sumit Malhotra
GM- Operations
Mr. Kabir Sahni
3 Works
Manager
(3 MUs)
Mr Manoj
Gupta Head
HeadQC &
R&D
President Operations
Mr. Apoorv Bajaj
CFO
Mr. V.C. Nagori
VP - Finance
Mr. D.K. Maloo
Country
ManagerBangladesh,
Nepal, GCC and
SEAN
GM IT
HeadTreasury
Regional
Commercial
Manager- 5
in No's
Head Supply
Chain &
Procurement
Mr. Devendra Jain
VP HR
Mr. Subhamay
Chatterjee
AGM / Sr.
MgrFinance
Head Legal
Mr. Ashish Kr.
Panigrahi
Head Purchase
Mr. Subroto
Ghosh
Sr. Mgr
Plng &
Distribution
Head
AGM
L&D
Mr. Dharmesh
J. Sanghavi
Internal
Audit
Company
Secretary
Hitesh
Kanani
Head IB
Mr. Pankaj
Banerjee
Mktg Head A
Dangi
Category
Managers
Sales Head
R Ghosh
DGM
South &
West
DGM ESS
AGM North
Sr.
Manager
Payroll
AGM Central
AGMEast
18
Financial Information
Summary Income Statement
(Rs. In Crore)
Particulars
Sales (Net)
EBITDA
EBITDA Margin
Profit Before Tax & Exceptional
Item
Exceptional Item (Trademark &
Intellectual Properties)
Profit Before Tax(PBT)
Net Profit after Tax
Net Profit Margin
Q2FY17 Q2FY16 HY 1 FY 17 HY 1 FY 16
196.15 189.57
399.88
389.71
68.30 65.75
140.36
133.13
35.10%
34.16%
34.82% 34.68%
80.81
71.54
6.64
11.75
74.17 59.79
58.30 47.03
29.72% 24.81%
158.91
18.38
140.53
110.50
27.63%
143.52
23.49
120.03
94.42
24.23%
(Rs. In Crore)
Particulars
(Rs. In Crore)
Shareholders Equity
Net Fixed Assets
AHO
1.9%
NOMARKS
3.3%
JHO
0.6%
BTP 0.1%
KPCO
0.1%
As on
31.03.2016
596.31
485.82
46.57
65.59
Investments
(including Bank FDs, Bank CDs and
Government Securities & Bonds)
Net Current Assets
535.08
14.66
414.93
5.30
Key Highlights
As on
30.09.2016
ADHO
92.4%
19
Particulars
Q2FY17 Q2FY16
YoY%
HY 1 FY HY 1 FY
17
16
YoY%
EBITDA
68.30
65.75
3.87%
140.36
133.13
5.43%
80.81
71.54
12.96%
158.91
143.52
10.72%
6.64
11.75
18.38
23.49
74.17
59.79
24.05%
140.53
120.03
17.08%
58.30
47.03
23.95%
110.50
94.42
17.03%
20
Material Cost
% of Sales
Employees Cost
% of Sales
Advertisement & Sales Prom.
% of Sales
Other Expenses
% of Sales
EBITDA
% of Sales
Other Income
Finance Cost
Depreciation
Corporate Social Responsibility
Profit Before Tax & Exceptional Item
Exceptional Item (Trademark &
Intellectual Properties)
Profit Before Tax(PBT)
Tax Expenses
Profit After Tax(PAT)
% of Sales
Basic & Diluted EPS (Rs.)
Q2FY17
196.15
0.63
Q2FY16
189.57
0.55
66.17
33.74%
14.64
7.47%
26.94
13.73%
20.73
10.57%
68.30
34.82%
14.92
0.22
1.09
1.10
80.81
72.98
38.50%
11.20
5.91%
19.19
10.12%
21.00
11.08%
65.75
34.68%
7.79
0.01
0.96
1.03
71.54
6.64
74.17
15.87
58.30
29.72%
3.95
11.75
59.79
12.76
47.03
24.81%
3.19
Rs. in Crore
YoY%
HY 1 FY 17
HY 1 FY 16
YoY%
3.47%
399.88
389.71
2.61%
1.21
1.28
3.87%
12.96%
24.05%
23.95%
136.56
34.15%
28.46
7.12%
53.40
13.35%
42.31
10.58%
140.36
35.10%
23.28
0.42
2.11
2.20
158.91
150.24
38.55%
22.32
5.73%
43.74
11.22%
41.56
10.66%
133.13
34.16%
14.43
0.02
1.96
2.06
143.52
18.38
140.53
30.03
110.50
27.63%
7.49
23.49
120.03
25.61
94.42
24.23%
6.40
5.43%
10.72%
17.08%
17.03%
21
Sales Performance
Sales (Value) :
Q2FY16 v/s Q2FY17
Sales (Value) :
HY1 FY 16 v/s FY1 FY17
200
150
100
189.57
196.15
Q2 FY16
Q2 FY17
50
0
In ` Crores
In ` Crores
250
450
400
350
300
250
200
150
100
50
0
389.71
399.88
HY1 FY16
HY1 FY17
22
KPCO
FY 16
BAHO
AHO
FY 17 FY 16 FY 17 FY 16 FY 17
Nomarks
FY 16
FY 17
FY 16
Others
FY 17
Total
FY 16
FY 17
FY 16
Q1
8,081
7,5381,371,3351,360,814
Q2
7,640
8,4451,303,7801,304,512
2,480,2712,432,962 9,590 9,291 27,177 30,824 85,937 94,920 56,420 81,346 15,721
15,9832,675,1152,665,326
Total
KPCO
FY 16
BAHO
AHO
FY 17 FY 16 FY 17 FY 16 FY 17
Nomarks
FY 16
FY 17
FY 16
Others
FY 17
Total
FY 16
FY 17
FY 16
Q1
188.72
183.11
0.64
1.29
2.36
2.68
4.18
4.27
6.37
7.57
1.46
1.22
203.73
200.13
Q2
181.18
172.57
0.17
0.23
3.10
3.23
3.79
3.83
6.54
8.28
1.37
1.43
196.15
189.57
Total
369.90
355.68
0.81
1.52
5.46
5.91
7.97
8.10
12.91
15.85
2.83
2.65
399.88
389.71
23
35.00%
31.88%
30.00%
28.37%
27.09% 27.04%
30.86%
31.67%
32.35%
33.62%
35.37% 34.82%
25.00%
20.00%
Gr (Value)
15.00%
Gr (Vol)
EBIDTA
3.47%
1.80%
0.77%
-3.24%
-4.95%
3.59%
2.96%
10.68%
8.34%
14.29%
12.11%
27.82%
23.03%
29.83%
21.06%
18.55%
8.80%
12.36%
3.51%
0.26%
-6.40%
6.85%
0.90%
0.00%
16.48%
14.96%
5.00%
23.18%
20.16%
10.00%
Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17
-5.00%
-10.00%
24
% to Sales
% to Total Cost
LLP
8.17%
24.02%
Glass Bottles
9.17%
26.94%
4.37%
12.86%
3.59%
10.55%
Corrugated Boxes
1.79%
5.25%
Caps
2.03%
5.95%
Others
4.91%
14.43%
TOTAL
34.02%
100.00%
25
100
100
80
80
Amount (Rs.)
Amount (Rs.)
60
40
59.30
58.82
20
44.55
44.22
60
40
82.02 78.41
77.64 77.13
20
0
During the quarter average price of LLP decreased to Rs 44.55/Kg from Rs 58.82/Kg in corresponding
quarter of previous year.
Prices of Refined Oil decreased to Rs 78.41/Kg from Rs 82.02/Kg in corresponding quarter of previous
year.
26
Fund Position
Fund Position:
The total Fund available with the company as on 30th September 2016
is Rs. 414.45 Crores
This has been invested in Bank Fixed Deposits, AAA rated PSU Bonds, Commercial
Papers, Government Securities and Liquid MFs.
There is no investment in ANY Inter Corporate Deposit
Particulars
Bank FDs
Bonds
400.47
6.00
414.45
27
Dividend per
share
(Rs.)
Year
No. of Shares
(in Lacs)
Face
Value
2015-16
1,475
16962.50
1150%
11.50
2014-15
1,475
16962.50
1150%
11.50
2013-14
1,475
9,587.50
650%
6.50
2012-13
1,475
9,587.50
650%
6.50
2011-12
1,475
5,900.00
400%
4.00
2010-11
295
2,802.50
190%
9.50
28
Managerial Bandwidth
As a constant endeavour to add to the Managerial capabilities within the company
we constantly engage in in-house and out bound training programs
Further to make all the functions better equipped in terms of bench strength the
company is also in the process of recruiting experienced managers from well
known FMCG companies
In this process Mr. Sandeep Verma has joined the organisation as PresidentSales & Marketing. He is an Mechanical Engineer from Motilal Nehru Engineering
College, Allahabad and holds a Management Degree from IIM, Lucknow. Mr. Verma
has worked more than 14 years in different function in HUL.
Mr. Sandeep Verma will lead the Sales & Marketing Department and contribute
towards the companys change management process.
29
Corporate Governance
Bajaj Corp Ltd is a part of the Bajaj Group of companies. The other listed entity
in the group is Bajaj Hindusthan Sugar Ltd
Bajaj Corp Ltd has not and will not transfer funds from and to any other company
within the Bajaj Group
The Company acquired in September 2011 (Uptown Properties) owns a piece of
land and building in Worli, Mumbai. Uptown Properties was previously owned by
the C.K. Raheja Group (i.e. Mr. Chandu Raheja)
The corporate Headquarters of Bajaj Corp Ltd will be constructed on this land.
The Construction is expected to be completed by end of 2017.
The Bajaj Group is well aware of issues regarding Corporate Governance and
would like to state that there will be no financial interaction between any of the
listed entities within the group.
30
Growth Strategy
Strategy
Action Steps
Convert coconut hair oil users to light hair oil users through sampling, targeted advertising
campaigns, product innovation and creating awareness about product differentiation including
communicating the advantages of switching to lighter hair oils. Aim for a market share of 65% by the
year 2017-18
Tap the increase in disposable income of rural India and convert rural consumer from unbranded to
branded products by providing them with an appropriate value proposition
Among its key competitors, our Almond Drops is the only brand which is available in sachets a
marketing initiative to penetrate the rural market
BCL has over the years created a strong distribution network across 3.6 mn. retail outlets which can
be optimally utilized by introducing new products
BCL intends to extend Almond Drops platform developed by its Almond Drops Hair Oil brand to
other personal care products to leverage on the strong connotation of Almonds with nutrition
Will seek inorganic growth opportunities in the FMCG and hair oil market as part of growth strategy
The inorganic growth opportunities will focus on targeting niche brands which can benefit from BCLs
strong distribution network so that they can be made pan India brands
Focus on rural
penetration
Leverage existing
strengths to introduce
new products
Pursue inorganic
Opportunities
31