ICICI Securities Initiates Coverage on Bajaj Consumer Care, Targets Rs 600

Bajaj Consumer Care Delivers Strong Q4FY26 Results, Reiterates BUY Recommendation

ICICI Securities' latest research report highlights the impressive performance of Bajaj Consumer Care (BaCo) in its Q4FY26 results. The company has successfully converted its execution into earnings, delivering a decisive beat on both growth and margins.

Revenue Growth Driven by Healthy ADHO-led Volume Traction

Bajaj Consumer Care's revenue growth was driven by healthy ADHO-led volume traction and continued strength across LUP and core packs. This was supported by rural recovery and an improving channel mix. The company's revenue growth is a testament to its ability to adapt to changing market conditions and capitalize on emerging opportunities.

Margin Expansion Driven by Favourable Product Mix and Cost Reduction

The company's gross margin (GM) expanded sharply due to a favourable product mix and a reduction in costs. This led to strong EBITDA expansion despite sustained brand investments. While part of the margin expansion is cyclical, improved execution is enabling better conversion of growth into earnings.

Q1FY27 to be a Key Test for Margin Sustainability

However, mix-led moderation in margins remains a key monitorable, with recent raw material (RM) volatility making Q1FY27 an important test for margin sustainability. The company's ability to navigate this challenging environment will be closely watched by investors.

Maintain BUY Recommendation with Revised Target Price

Despite these challenges, ICICI Securities maintains its BUY recommendation for Bajaj Consumer Care. The research report models revenue, EBITDA, and PAT compound annual growth rates (CAGR) of 12%, 19%, and 18%, respectively, over FY26-28E. The revised target price is INR 600, based on a DCF-based valuation methodology.

| Financial Metric | FY26E | FY27E | FY28E | | --- | --- | --- | --- | | Revenue Growth | 12% | 15% | 12% | | EBITDA Growth | 19% | 22% | 19% | | PAT Growth | 18% | 20% | 18% |

Target Price and Valuation

At the revised target price of INR 600, the stock could trade at 32x price-to-earnings (P/E) Mar'28E. This valuation reflects the company's strong growth prospects and improving profitability.