Bajaj Corporation - Premium Hair Oil Brands
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Emerging companies - Mid caps that can become large cap
Forum Discription: These are companies operating in growing markets having have certain niches or specific attributes like new sector plays. These are emerging multibaggers with high risks and high rewards.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=3048
Printed Date: 07/May/2025 at 4:27pm
Topic: Bajaj Corporation - Premium Hair Oil Brands
Posted By: Kautilya
Subject: Bajaj Corporation - Premium Hair Oil Brands
Date Posted: 28/Oct/2010 at 9:34pm
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Bajaj Corporation, part of the Shishir Bajaj Group (Bajaj Hindustan) went public recently and owns popular brands such as Bajaj Almond Drops and Bramhi Amla Hair Oil. The company has positioned itself as leaders in light hair oil category and expects to launch new products and/or
consider buy outs with the IPO proceeds. The IPO size has been about 280 crores which the management expects to put in use by 2014. Since it has only been a short while the company went public, I was not able to get the adjusted financials for last few years. However the company does make claims of good growth. Valuation wise, extrapolating the last couple of quarters one can bet for an EPS of anywhere between 35 to 45, which translates to PE of 14.5 to 18.5 at the current price of Rs.650 which incidently is the price at which anchor investors were roped in. This would also make it one of the cheapest FMCG stocks in today's market. Recent quarter results looks healthy if you consider the one time IPO costs that were accounted for. However the market doesn't seem to be liking it and the stock has gone below its issue price. Request Teddies to post their opinions on how they see the company in the next 2 to 3 years time. I am especially looking forward to hear about why one should not invest in this one, and what the skeptic inside you is telling? Some Additional Pointers Bajaj Corp RHP: http://www.sebi.gov.in/dp/bajajcorpfin.pdf Company Website: http://www.bajajcorp.com/Investors.html I am invested. |
Replies:
Posted By: Kautilya
Date Posted: 14/Nov/2010 at 11:24am
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Delivery based volume was big on Friday.
During the IPO time, the management had given an indication of 45% rise in paraffin costs which is the main raw material for hair oil. They had passed on the price rise in May 2010 and had indicated that they may not pass on prices again in the near future. Other than this don't see any change in the fundamentals. Looks like a good buy at current price. |
Posted By: excel_monkey
Date Posted: 15/Nov/2010 at 2:55pm
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How is the raw material price behaving now
should be up with the crude?
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Posted By: Kautilya
Date Posted: 15/Nov/2010 at 3:51pm
| No idea about the raw material prices. I assume it is co-related with crude prices. |
Posted By: garun1980
Date Posted: 15/Nov/2010 at 4:40pm
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Yes the RM prices are correlated to the crude price.
------------- Back in school!! |
Posted By: subu76
Date Posted: 15/Nov/2010 at 10:52pm
Hi All, I haven't used hair oil for a long time now (my hair is naturally oily  ) Any one who is a frequent user of their product?
I guess the raw material prices would impact all players and my understanding is that FMCG players are able to pass on some of the price increases besides playing other tricks like reducing the volume per pack, cost cutting while packaging etc.
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Posted By: subu76
Date Posted: 15/Nov/2010 at 10:56pm
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Went and checked that the hair oils in our bathrooms are Dabur Amla, Himani and Parachute...no Bajaj in our household (atleast in the bathrooms) .. will request my wife to get this stuff next weekend
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Posted By: hit2710
Date Posted: 15/Nov/2010 at 11:18pm
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I would like to share some details.
Positives: 1. Bajaj Corp is the market leader(around 50% market share) in the "light" hair oir category with its flagship brand Bajaj Almond Drops Hair oil. The latter contributes around 90% to its topline. Now this light hair oil category is the fastest growing category in the hair oils category growing around 18% in volume terms and 28% in value terms for the last three years. 2. The company intends to use the IPO proceeds for brand building purpose of new product launches. They intend to launch four new products out of which one could be the cooling oil. (I guess something like navratna thanda thanda cool cool). Other products are yet to be disclosed. 3. No debt and good balance sheet. 4. Company mainly focussed on Northern India with bulk of its manufacturing facilities there. 5. Good nationwide distribution network. 6. Bajaj Almond drops enjoys premium pricing in the category with its price probably highest among peers. The brand is gradually entering the rural markets as well because of increase in rural prosperity. Negatives: 1. Bulk of revenues from single brand i.e bajaj almond drops hair oil, so single product risk is there. 2. Raw material is paraffin which is linked to crude prices and because of extremely competitive market, there is difficulty in passing total price hike and often there is lag period. 3. Promoters gave themselves a dividend of 100 crores just before IPO, money which could have been used for the benefit of the company and subsequent shareholders. So investment in Bajaj Corp is a bet on the company leveraging the brand value of Bajaj Almond Drops to launch brand extensions and increase sales and establish the newer products which it plans to launch in the markets. Recent fall appears to be due to latest quarter results which in all probability are poor in light of higher raw material costs. For comparision purpose, one can compare it with marico which is a much bigger player in the hair oils market. Bajaj Corp has a market cap of around 1740 crores whereas marico has a market cap of around 8550 crores. Based on last four quarters marico is available at a pe of 34 whereas bajaj corp is around 30. FY 10 sales for marico was around 2025 crores whereas Baja corp sales was 330 crores. NPM for marico was 11.6% in FY 10 whereas for Bajaj Corp it was 25.43%. (PAT margins for Bajaj Corp in Sep 2010 quarter went down to 18.6%) Finally marico has some debt (375 crores) on its books whereas Bajaj Corp is cash rich post its IPO. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: subu76
Date Posted: 15/Nov/2010 at 11:26pm
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Hitesh Bhai, Thanks a lot for the insights. Some quick questions:
1. what is light hair oil category?
My wife bought this cold oil for me saying it will help me be cool and calm.
2. Also how has the company fared when it introduced new products earlier.
3. Also, please don't forget to share insights on Polymed if possible
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Posted By: hit2710
Date Posted: 15/Nov/2010 at 11:48pm
Light Hair oil to the best of my understanding is non-chip-chipa Hair oil. Non "thick" kind of hair oil which the youth of today crave for. Density of this light hair oil is very low. Regarding new products and their success, when most of the revenues are from Bajaj Almond drops, I dont think they have made significant headway in other products. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: rinkumalpani
Date Posted: 15/Nov/2010 at 12:11pm
| i just called up my uncle and asked him about the hair oil brand which was registering the highesst sale at his store..and surprise surprise..he said that in the recent months it was bajaj almond..thopugh he seemed pretty confident that the sale increase of the oil was because of the free gift, a godrej soap, offered by the co. with every piece of bajaj almond drops above 50 ml btl..so, not sure about the oil standard...but he also mentioned that consumers who use parachute(maric) and dabur products like dabur vatika , dabur amla are very loyl to their products and dont prefer changing them frequently...so, i interpret that even though bajaj corp management seems to be agressive( trying to increase sales by offering free gifts), it will be difficult to penetrate the existing loyal customer base of other brands and co.s unless bajaj offers something more unique in terms of qualuty and standards apart from that free soap..never the less, the fact is, it is clocking higher sales in the store for the time being......now, how does that relate with the stock price?? |
Posted By: kailasp4u
Date Posted: 15/Nov/2010 at 12:37pm
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P/E is 20.78 at CMP 591 on TTM basis.
ROE is 23.13, no info of dividend payout ratio.
At 1743cr mcap, its mcap/sales ratio is 5.3
Sales growth from 2009 to 2010 is 35% and OP & NP growth is at 75%plus. This is from data available in economictimes.
So from P/E basis, it isnt costly, but mcap/sales has reached fair value compared to its size and segment.
Issue price was 660,now below issue price.
Anyone has studied in detail? Whats good price to buy? ------------- knp |
Posted By: excel_monkey
Date Posted: 15/Nov/2010 at 12:58pm
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The big question is
what are they going to do with the cash they have collected in the IPO? when and how profitable the new product launches going to be looking at the growth the oil had in past three years is phenomenal
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Posted By: subu76
Date Posted: 15/Nov/2010 at 12:58pm
Any idea what kind of clientele does he cater to?
Please do ask him how they do in normal times? when offers are not acting as the push factor
What about the good old rural market?
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Posted By: subu76
Date Posted: 15/Nov/2010 at 1:00am
Wonder why moneycontrol calls out a 6%+ yield then..weird
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Posted By: hit2710
Date Posted: 15/Nov/2010 at 7:22am
Nothing weird Subu. the promoters before doing the IPO helped themselves to around 100 crores as dividend. Hence the figures. I dont think the public shareholders are going to get anything close to the 6% div yield. Another thing mentioned earlier about quality of products etc, I feel a company cant have a 50% market share without proper quality and hence matter of quality is a foregone conclusion. But growth will have to come from increased penetration to the rural markets and successful launch of newer products. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: EquityInv
Date Posted: 15/Nov/2010 at 7:39am
This is excerts from one of the http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Kushagra-Bajaj-Vice-Chairman-of-Bajaj-Corp-Ltd./19310291 - interview by Kushagra bajaj Brief us about your market share? We have not brought our market share to 50% by lowering prices but by increasing prices. This is clearly indicative of our strength in Branding, Products, Presence and Distribution. ------------------------------------------------------------ It's well recognised brand and hence commands premium too. Any idea on management [Kushagra Bajaj]? About factors like integrity,ambition, management skills,etc.. In one of his interview, he also mentioned that they are working onto de-risk dependency on 1 product. No doubt, this looks like one of the best pick at current valuation in FMCG sector now. ------------- One of the best rules anybody can learn about investing is to do nothing, absolutely nothing, unless there is something to do – James Rogers |
Posted By: excel_monkey
Date Posted: 15/Nov/2010 at 7:52am
On my radar since it was IPOed but it has a long way to go before it proves itself
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Posted By: EquityInv
Date Posted: 15/Nov/2010 at 7:56am
Thanks for good summary hitbhai.. Couple of more positives.. 1)According to one of the report "The Indian light hair oil industry is growing at an 18% per annum by volume (CAGR for past 4 years) and 28% by value (CAGR for last 4 years)." If we are to believe this then company should be able to achieve more than industry growth in future too. 2) The company has three manufacturing plants at Parwanoo, Dehradun and Ponta Sahib. Operations at Ponta Sahib commenced from March 2010, which more than doubled its production capacity for light hair oil top 74 million litres per annum. Hence they dont need any investment in capacity expansion anytime soon. 3)With expected very high RoE and 30% growth, they should be able to payout decent dividend regularly. ------------- One of the best rules anybody can learn about investing is to do nothing, absolutely nothing, unless there is something to do – James Rogers |
Posted By: subu76
Date Posted: 15/Nov/2010 at 8:38am
So the company never really needed an IPO in the first place....
 I think that's the charm about these self funded FMCG type companies
Personally i've somewhat mixed feeling about growth into other areas....while 2 of my companies (Hawkins and TTK) managed the transition successfully it was an utter failure with Agrotech...(atleast that is the verdict so far) |
Posted By: excel_monkey
Date Posted: 15/Nov/2010 at 8:42am
Well the Junior Bajaj wanted to become a paper billionare like his cousins
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Posted By: somu0915
Date Posted: 15/Nov/2010 at 10:21am
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Nice discussion going on. As far as I know they are going to venture out into new "Non-Oil" areas. What are they? It is important that they take the right approach towards it. But it cannot be seen at this point of time. |
Posted By: ash7979
Date Posted: 15/Nov/2010 at 10:27am
How do you know they are going to venture into "Non-Oil" segment, do you have any link for the same...What I know they wanted to enter into "Cool Oil" Segment like Himani navratn (Thanda-thanda cool-cool)..This info also not come from company & I have read this in various IPO notes. ------------- Fear can hold you prisoner. Hope can set you free.... |
Posted By: tejas
Date Posted: 17/Nov/2010 at 8:45pm
Out of The Juniors, I would be more inclined to go with Sanjeev only now that Bajaj Auto has been split up by Rahul Bajaj for his sons. |
Posted By: excel_monkey
Date Posted: 17/Nov/2010 at 8:53pm
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I think Kushagra is the brightest
Rajeev and Sanjeev got the scale on a platter
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Posted By: rinkumalpani
Date Posted: 17/Nov/2010 at 9:05pm
Subuji, enquired and found that the clientele includes more of the younger generations..teenagers and office goers... ..it seems elderly people still prefer a parachute coconut over bajaj almonds....also asked him which hairoil registered better sales than bajaj almonds in the previous months..he told me it was clinic plus and clinic all clear..both by hindustan unilever and both are non sticky kind....went a step ahead and called up a relative of mine who has a shop near a tea garden..and found out that even though sales of bajaj almonds have increased there,it hasn beaten the other brands and the tea garden labours and villagers still prefer cocunut hairoils (dont know whether that goes to say about all villagers)and hence brands like parchute and malabar and clinicplus have better sales there.. |
Posted By: bitu1978
Date Posted: 17/Nov/2010 at 9:26pm
| One thing I have Noticed on Hair oil brands is the Loyalty of the customers .In My family everybody uses only parachute hair oil. If i can remember from 1995 till now almost last 15 years we are using parachute hair oil.In Last fifteen years there have been lot of new brand Launches but I have never bought any other hair oil.I am assuming there will be lot of customers like me who are brand loyal .This Type of customer loyalty I have seen only for Toothpaste/Hairoils/shampoos . So I doubt whether Bajaj Corp would be able to get those Customers and being a single brand FMCG company it is going to be very tough for bajaj to increase sales by grabbing customers from other brands |
Posted By: excel_monkey
Date Posted: 17/Nov/2010 at 9:35pm
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As such Bajaj has something like 50% of share of light hair oil segment
the growth if any would come from new product launches (non hair oil)
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Posted By: kushal.masand
Date Posted: 17/Nov/2010 at 10:16pm
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hello everybody, it seems there is alot a lot of discussion going on about the clientale of Almond drops hair oil. I m doing MBA and I have been using Almond drop from last 8 years and everybody in my group uses it( if they uses any). It is the only choice for the youngsters( read boys as gals uses Livon) as it gives ur hair a wetlike look without using a hair gel and without the side effects of alcolohal based gels. People have been talking abt thanda-thanda, I can tell you u cant apply thanda-thanda and go outside as it is damn smelly..... |
Posted By: Ravenrage
Date Posted: 17/Nov/2010 at 10:26pm
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I am young too ( a little younger than you ) . I don't use Almond Drop ( haven't seen it yet ! ). Its better eaten than applied on hair , I believe ! (Almonds I mean)
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Posted By: vaib
Date Posted: 17/Nov/2010 at 1:22am
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Is it really almond oil? In that case Indian people would start drinking the oil. Every time I go home my parents ask "Are you eating almonds? Should we buy and put 1 kg in your bags?" Old people are almond crazy as it increases brain function (told by elders :p)
Jokes aside, I myself and whole family use parachute. Many people around used to use aanwala oil as well which belonged to bajaj I think. Strange that aanwala and almond oil are not really the aanwala or almonds but coconut oil is really the coconut oil :p. |
Posted By: excel_monkey
Date Posted: 17/Nov/2010 at 1:27am
Yes, almond oil is considered to be have brain enhancing capabilty under Indian tradition 
and that is the reason I think Bajaj's sales have gone explosive
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Posted By: kushal.masand
Date Posted: 17/Nov/2010 at 2:07am
| in their key inngredients onne is SWEET ALMOND OIL |
Posted By: Kautilya
Date Posted: 18/Nov/2010 at 3:23pm
| This one don't seem to have much volumes, but does any body know what the technicals are saying? |
Posted By: NeerajMarathe
Date Posted: 18/Nov/2010 at 6:33pm
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I would stay away from this company..
1) There is going to be 6.5 cr writeoff of IPO expenses every quarter for the next 2 quarters..(they spent 18 cr on the IPO!!!)..thats about 1/4th the 'usual' quarterly profits of about 25 cr.. 2) Launching of new products in different areas will entail high advertisement cost..so over the next 1 year atleast, an increase in earnings should not be expected.. ------------- Regards Neeraj Marathe |
Posted By: EquityInv
Date Posted: 18/Nov/2010 at 3:50am
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Deleted ------------- One of the best rules anybody can learn about investing is to do nothing, absolutely nothing, unless there is something to do – James Rogers |
Posted By: excel_monkey
Date Posted: 18/Nov/2010 at 4:13am
So how much of this 18 crore has already been provided and how much is still left
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Posted By: NeerajMarathe
Date Posted: 18/Nov/2010 at 10:51am
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Hi excel,
the following is in the notes to the Sept 10 result.. The IPO Expenses aggregating to Rs. 18.95 Cr would he written off during the current year. Accordingly an amount of Rs 6.31 Cr being one third at the IPO Expenses is written off in the current quarter and the balance amount will be written off equally in the next two quarters of current financial year. Hope it helps... ------------- Regards Neeraj Marathe |
Posted By: excel_monkey
Date Posted: 19/Nov/2010 at 3:49pm
I hope the market correction as well as this one off provides us with a good entry point
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Posted By: Kautilya
Date Posted: 27/Nov/2010 at 10:00pm
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Investor Presentation, Nov 2010
http://www.bajajcorp.com/Investors%20Presentation%20-%2020.11.2010.pdf From the presentation... Light Liquid Paraffin (LLP) accounts to 35.48% of total costs and its price has increased by 52% in Q2 as compared to previous year (Per Kg rate of LLP was 43.10 last year and is at 61.29 this year). This has adversely affected the overall profitability of the company. |
Posted By: excel_monkey
Date Posted: 27/Nov/2010 at 10:08pm
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Thanks Kautilya
do you also have any research report on this company ?
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Posted By: Kautilya
Date Posted: 27/Nov/2010 at 10:28pm
| Haven't come across any new research reports on this other than the ones that were available during the IPO time. |
Posted By: nikhil090
Date Posted: 04/Dec/2010 at 5:53pm
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Conference call transcript. http://www.bajajcorp.com/Conference%20Call%20-%2021.10.2010.pdf While this is extremely cheap right now, it is a one product company and any trigger may take time to fructify (new product introduction and success). Till the time people have to wait patiently and keep on accumulating this one, if they believe in the story. |
Posted By: excel_monkey
Date Posted: 04/Dec/2010 at 6:01pm
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this one is not going anywhere in a hurry
the next two quarters are going to be bad because of IPO expenses no new product launches as mentioned in the transcripts
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Posted By: subu76
Date Posted: 04/Dec/2010 at 1:42am
| The other thing is IPO numbers is a bit of a suspect....we'll have a much better picture in a year or two i guess... |
Posted By: Kautilya
Date Posted: 04/Dec/2010 at 8:48am
Why do you think so subuji? They raised about 280 crores through IPO for which 18.95 crores were put as IPO costs, which comes to a one time cost of about 7% of the capital raised. I had read somewhere that the IPO costs usually range from 6% to 10% and often depends on the size of the issue among other things. The smaller the issue the larger would be the IPO costs. |
Posted By: Kautilya
Date Posted: 04/Dec/2010 at 10:04am
I agree. But given the nature of their business, I think yield/payout ratio might return to a good level in a few years time but may not happen anytime soon.
They could have never done this IPO without the hefty pre-IPO dividend. They would have had enough cash on the books and the rest could have been easily raised through debt. What makes it even more interesting is their dividend payout tax could be as much as this IPO expense of 18 odd crores or may be even more. |
Posted By: nav_1996
Date Posted: 04/Dec/2010 at 10:27am
| So promoters sucked cash from company on one hand through div and raised cash from IPO on the other hand. Does not speak very highly about the promoters? |
Posted By: Kautilya
Date Posted: 04/Dec/2010 at 10:56am
Don't know if we can be judgmental about the management based on the above. It is not uncommon for companies to pay pre-IPO dividends which is a way of rewarding old shareholders (instead of a complete exit). All this was reflected in the books and priced in the IPO, so don't think we can complain about it. Another way to look at this is, the management has sold the stake to public after taking out all the accumulated profits the company had produced. This doesn't change anything in the business (as it requires low cash for operations) and it is expected to generate cash in the same rate or better in the future. Seniors, please let me know if I am missing anything here? |
Posted By: subu76
Date Posted: 04/Dec/2010 at 10:57am
My point was it generally makes sense for the promoters to dress up the numbers before an IPO.........might be wrong.......
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Posted By: nav_1996
Date Posted: 04/Dec/2010 at 11:28am
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Technically they are right but how about their intent of treating minory shareholders. Prmoters knew that market will pay only for operating business and not cash on books so they sucked it out.
Also, this first company I have noted which is stating that results are bad because of IPO expenses. Ideally they should have used cash to grow the biz rather than doing for hefty div and IPO (thus paying div tax and IPO expenses). There was another report saying they have not used much of amount for any new launches so far. Hero honda is another drama which is unfolding which shows promoter's greed. They are buying Honda's stake at discount in lieu of higher royalities. So indirectly minority share holders pay for promoter's stake increase at a discount. |
Posted By: camanoj
Date Posted: 08/Dec/2010 at 6:34pm
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http://www.bajajgroups.com/international/veola_amla_hair_oil.html -
Bajaj Herbals, an ahmedabad based co, has hair oils & other hair care products simialr to that of bajaj corp's. Following is the link to cool hair oil.
http://www.bajajgroups.com/international/veola_amla_hair_oil.html ------------- Manoj |
Posted By: excel_monkey
Date Posted: 09/Dec/2010 at 8:16pm
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now really at very attractive levels
growing FMCG company quoting at a P/E of 14 |
Posted By: Kautilya
Date Posted: 09/Dec/2010 at 10:01pm
Either we are missing something that the market knows or the market has been completely irrational. I did some 'scuttlebutt' on Almond Drops. The sales guy in the store I had been to recommended and vouched for it. Price for 100ml bottle remained 42 which means no price hikes since May this year. Manufactured date of Oct 2010, tells me units are moving well and are not getting piled up in the godown. I did my bit for the company and bought one
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Posted By: subu76
Date Posted: 09/Dec/2010 at 10:08pm
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I don't think the quality of the products in the hair oil segment can be doubted at all.....These guys sell
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Posted By: excel_monkey
Date Posted: 09/Dec/2010 at 10:17pm
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The management says that they are not going to launch any new products soon (from call transcripts)
they are leaders in their segment 50% market share and the promoter is very ambitious I think the management was undermining the possibility of a launch and they would launch new products soon and they have the formula for a successful implementation |
Posted By: TCSer
Date Posted: 09/Dec/2010 at 10:57pm
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The co being a single product co seems to be a major negative together with lauch of Nihar almond drops by Marico or is t Dabur? Shishir Bajaj with his dealings with Mayawati also leaves a poor impression on ethical part. |
Posted By: Jaishrikrishna
Date Posted: 09/Dec/2010 at 11:06pm
Basically they have done their job smartly and raised money through IPO at a right time.  ------------- Don't Buy and Hold, Buy and Homework / Fish see the bait,but not the hook; Men see the profit, but not the peril. |
Posted By: excel_monkey
Date Posted: 09/Dec/2010 at 11:06pm
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Rahul Bajaj did a holding structure thing with the Bajaj auto split which was highly shareholder unfriendly
keeping aside the promoter impression what kind of discount you would give to a single product company the company always had the potential but see what Kushagra has done to the growth remember even Marico was a single product company till a few years back he is ambitious and would find his way
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Posted By: kushal.masand
Date Posted: 09/Dec/2010 at 11:48am
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money control shows the book value as rs. 10.22. Is it right?? if it is thn isnt it steeply priced??? |
Posted By: ash7979
Date Posted: 10/Dec/2010 at 12:10pm
BV ( ` ) : 110.14... Source: http://www.edelweiss.in/company/Bajaj-Corp-Ltd.html ------------- Fear can hold you prisoner. Hope can set you free.... |
Posted By: kushal.masand
Date Posted: 10/Dec/2010 at 12:20pm
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still it's price/book value is 5 times. does a company with only one product justifies it??? |
Posted By: ash7979
Date Posted: 10/Dec/2010 at 12:23pm
Here is the comparison:
Source: http://www.edelweiss.in/market/equities.aspx?co_code=38716,3392,21960,12585,6423 You can take your call based on above data..Its cheapest among all & ONLY one product could be the reason for the same... ------------- Fear can hold you prisoner. Hope can set you free.... |
Posted By: kushal.masand
Date Posted: 10/Dec/2010 at 12:26pm
| bt isnt gcpl is better, considering their attractive m&a strategy...??? |
Posted By: kailasp4u
Date Posted: 10/Dec/2010 at 1:16pm
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Do your own calculations, dont believe moneycontrol or any site blindly. Manytimes data is not updated. Edelweiss is comparatively better since it gives consolidated data also, which others dont.
And consider consolidated data always for overall picture! ------------- knp |
Posted By: kushal.masand
Date Posted: 10/Dec/2010 at 1:41pm
| thanks!!!! :) |
Posted By: subu76
Date Posted: 01/Jan/2011 at 1:07am
| Checked out the ads on their site....the company does seems to have a pretty good ad conceptualization team ... |
Posted By: Kautilya
Date Posted: 02/Jan/2011 at 8:45am
While I could see Bajaj Almond drops occupy shelf space in most super markets, retail stores and pharmacies in Bangalore, couldn't find any products from "Veola". Back in Singapore, I could see Mustafa Centre keeping a lot of stock of Dabur Amla and Veola Amla Hair Oil. It appears to me that Veola/"Bajaj Herbals" don't have much of a presence in India and are more export oriented.
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Posted By: excel_monkey
Date Posted: 30/Jan/2011 at 3:52am
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For all you ROE lovers this will give you multiple orgasms
The ROE of Bajaj corp is 400% if one excludes the cash from IPO out of the roe computation
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Posted By: subu76
Date Posted: 30/Jan/2011 at 8:35am
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But ROEs typically fall after IPO
Just like growth rates are falling for this company immidiately after IPO
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Posted By: Kautilya
Date Posted: 30/Jan/2011 at 9:03am
| They are in the business of FMCG for a long time and have a good distribution network in place. The bet here is, how well they can exploit it with newer products which can reduce the burden of raw material (Almond drops account to 90+% of sales and profit and liquid paraffin which is the main RM has gone up along with crude). Untill then it is going to get treated like a commodity company. |
Posted By: commnman
Date Posted: 11/Feb/2011 at 5:16pm
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Kaale ghane baal? bajaj ka oil!
Q3 results out... Note: Numbers in brackets are of previous SQ-10. Total Income up 24.3% to 86.16 Cr from 69.3 Cr (up 6% from 81.37 Cr) EBIDTA up 25% to 26 Cr from 20.8 Cr (up 12.2% from 23.18 Cr) Adj Net Profit (stripped off IPO exp) up 38% to 25.72 Cr from 18.65 Cr (up 20.1% from 21.42 Cr) EBIDTA margin is 30.19% V/s 30.03% (DQ-09) and 28.49% (SQ-10) Adj NET Pr margin is 29.85% V/s 26.92% (DQ-09) and 26.33% (SQ-10) Cost of goods sold as a %ge to Income is 43.6% V/s 40% (DQ-09) and 42.3% (SQ-10) Employee cost slightly down. Other expenses too down to 21.57% v/s 24.26% (SQ-09) Tax rate 15.51% v/s 17.07% EPS for the quarter is 6.58. - ------------- main toh aam aadmi hun... jo sunta hoon wohi sach maanta hoon |
Posted By: excel_monkey
Date Posted: 11/Feb/2011 at 5:34pm
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Thanks
So it is the tax an other expenses which saved them this quarter
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Posted By: Kautilya
Date Posted: 11/Feb/2011 at 6:13pm
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Thanks for the nice analysis. If they are on track with new products then, next couple of quarters might see advertisement expenses.
Also there was a block deal on this one yesterday. Stock appears to have found bottom?
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Posted By: commnman
Date Posted: 11/Feb/2011 at 6:19pm
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And now goes in for 5:1 stock split! So soon after IPO...
http://www.bseindia.com/stockinfo/anndet.aspx?newsid={6AF6862B-566B-40C5-B9A7-08424F8AF6BE}¶m1=1 ------------- main toh aam aadmi hun... jo sunta hoon wohi sach maanta hoon |
Posted By: Kautilya
Date Posted: 11/Feb/2011 at 6:26pm
I wonder if that is going to improve liquidity. Are there any other reasons companies do this other then the intent of improving liquidity? Also in this case the stock is trading around 400 and not highly priced in absolute terms.
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Posted By: hemtan100
Date Posted: 11/Feb/2011 at 6:54pm
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just a liquidity thing for this one.
anyways, the results are good and hope the markets stay irrational for a while to give sufficient time to accumulate this one.
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Posted By: ash7979
Date Posted: 11/Feb/2011 at 7:01pm
This stock already had its face value Rs5 & now they are going for 5:1 stock split, when market price is ONLY 400 Rs.. This 5:1 split will make its price around 80 Rs...But I didnt understand why companies which such a low Price go for stock split & on other hand companies like Titan having price around 3000 keeps its face value at 10 Rs... Is it doe to make their stock available for Speculation or is it done to make their stock LOOK CHEAP  ------------- Fear can hold you prisoner. Hope can set you free.... |
Posted By: subu76
Date Posted: 11/Feb/2011 at 8:59pm
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I've a bad feeling about such stocks (where managements go for the stock market jugulars)..I remember a company called FCS Software which used to do a lot of these......i did not get crushed since i sold out early entirely due to providence The bright side is that atleast their action helps me move on and remove this stock out of my tracking list Right now it's important for the company to focus on product innovation as it is a one trick pony....but then stock splits can raise market cap very easily while introducing new producrs and selling it is tough |
Posted By: bitu1978
Date Posted: 11/Feb/2011 at 10:46pm
I had read Somewhere in TED that bajaj group is not Rated very highly in terms of Considering Investor's Interest . Now i know why |
Posted By: barla
Date Posted: 11/Feb/2011 at 10:54pm
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It is not onlly the bajaj, but also tatas, birlas and reliance.
The returns which investors have got is not all that great. But there has been steady returns and the company is there after 20 years doing reasonably well.
So to that extent it is a buy and forget sotry with retunrs in line witht the market. about 15% to 18% over 20 years including dividend payout.
So these companies are good to that extent.
But then even the Tatas are not aboveboard as the Nira Radia tapes so.
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Posted By: Kautilya
Date Posted: 12/Feb/2011 at 8:31pm
Didn't understand how splits can increase market cap? Agree with you on what should be the management focus. It signals that the Management is watching the stock price and with the proposed split ratio the stock price will fall under the same range as its competitors like Marico and Dabur. As you rightly said focus should be on product innovation and growth, and if they are really bothered about their stock price they could have decided to come out and talk about how much progress they have made on new products while withholding any information that might hinder their competitive advantage. |
Posted By: subu76
Date Posted: 12/Feb/2011 at 8:54pm
Sorry, did not elaborate...splits can often cause a pop on price due to various factors......some investors do specialize on split/bonuses strategies and it has worked out pretty well for them
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Posted By: bitu1978
Date Posted: 12/Feb/2011 at 9:12pm
Our TED Split Expert Dhirajkantjee can provide some insights on this |
Posted By: excel_monkey
Date Posted: 12/Feb/2011 at 9:35pm
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I don't think there is any malafide intent behind this split
it might be to shore up the interest in the stock after it fell some 40% in last few weeks |
Posted By: subu76
Date Posted: 12/Feb/2011 at 10:22pm
This is exactly what a ticker watching management would be doing.
Here is a synopsys of what i've gathered so far... please correct me if i am wrong
1. IPO happens on the back of great earings growth before the IPO.
2. IPO is to raise money for new for new products.
Now company says
1. No new products are planned any time soon (perhaps they're keeping their cards close to their chests)
2. The company can't grow at earlier rates since they already have 50% of the market.
Before 1 year of publlic life a stock split is announced.
The company can still make a good deal but the above factors also needs to be accounted for.
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Posted By: ash7979
Date Posted: 12/Feb/2011 at 10:36pm
Some Positives:
My ONLY concern in this stock is management quality, as Div payout ratio before IPO was 128%...thats means promoters have just taken all profit of last year as div to them self & now they have gone for stock split as well.... I am really confuse on this stock,so any Senior TED member would like to help me on this...As we have so many positives on this stock, so should I go for it or not?? ------------- Fear can hold you prisoner. Hope can set you free.... |
Posted By: excel_monkey
Date Posted: 12/Feb/2011 at 10:49pm
| I think the drastic fall was because of some institution who wanted to exit and there is hardly any liquidity (2000 -3000 shares per day) |
Posted By: rajivsubra
Date Posted: 12/Feb/2011 at 11:07pm
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So many positives in the core business: Good brand, strong RoE, Growing marketshare
BUT - I just don't understand some of the actions of management: 1. Why IPO? To create a listed stock with some marketcap? 2. Why split? To grow that market cap? 3. Why raise 280 crores? They have not spent a single rupee from the raised capital and have not stated a single word on what they plan to do with it! This just seems to be such a beautiful little business to own, and its really frustrating to see management monkey around. |
Posted By: ash7979
Date Posted: 12/Feb/2011 at 11:28pm
1. Why IPO? To create a listed stock with some marketcap? IPO could be Marketing activity to get name in market, that will help them to launch new products...About new products announcement, they might be tight lipped coz, they might not like to disclose this too early....I think we should wait till this year end & lets see what types of announcement management do in their AGM in June-July... ------------- Fear can hold you prisoner. Hope can set you free.... |
Posted By: excel_monkey
Date Posted: 12/Feb/2011 at 11:38pm
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most of FMCG companies don't need any IPO cash
but I am a bit disappointed by Bajaj as they haven't invested a single penny yet in new products |
Posted By: subu76
Date Posted: 12/Feb/2011 at 12:06pm
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Maybe they plan to use it for an acquisition....that might explain it |
Posted By: excel_monkey
Date Posted: 12/Feb/2011 at 12:35pm
valuations are sky high in FMCG space
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Posted By: Circuit
Date Posted: 12/Feb/2011 at 7:12am
As per DRHP, The entire IPO amount 220Cr. was raised only for Brand Building.
------------- Fundamentalists and anticipators may have difficulties with risk control because a trade keeps looking ‘better’ the more it goes against them....Ed Seykota |
Posted By: Kautilya
Date Posted: 12/Feb/2011 at 7:54am
| Actually they had mentioned 50 Crs allocation for acquisition, out of the 270 odd crores that were raised. |
Posted By: Kautilya
Date Posted: 12/Feb/2011 at 8:17am
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Meanwhile Key RM, Liquid Paraffin continues to trade above Rs. 50/lt. This should move along the direction of Crude Oil. The last price hike by Bajaj Corp was in May 2010. Last month Marico hiked prices on all coconut oil brands on account of steep rise in coconut oil prices.
Date Liquid Paraffin (Rs/Lt) Jan-09 47 Feb-09 44 Mar-09 37 Apr-09 34 May-09 34 Jun-09 35 Jul-09 30 Aug-09 35 Sep-09 35 Oct-09 35 Nov-09 35 Dec-09 36 Jan-10 35 Feb-10 36 Mar-10 37 Apr-10 37 May-10 37 Jun-10 37 Jul-10 42 Aug-10 45 Sep-10 49 Oct-10 51 Nov-10 52 Dec-10 52 Jan-11 53 |
Posted By: valuepicks
Date Posted: 14/Feb/2011 at 3:40pm
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Well said Subu...
One can make products more affordable - but there are always management teams thinking to make their shares affordable (at least they think so!)
------------- Investment Rule #1: Do not lose capital. Rule #2: Do not forget Rule #1 - Warren Buffett. |
Posted By: Kautilya
Date Posted: 14/Feb/2011 at 5:09pm
| I think one should give the management some benefit of doubt and not read too much on the stock split, given that they have been growing top line and bottom line at a decent rate while improving the profit margin in a period where the raw material costs have reached new heights. |
Posted By: Kautilya
Date Posted: 14/Feb/2011 at 7:54pm
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Anand Rathi have just come up with http://breport.myiris.com/ARSL/BAJCORP_20110211.pdf - this report. They have a Hold rating with target price of 672.
Edit: Quarterly Investor http://www.bseindia.com/xml-data/corpfiling/announcement/Bajaj_Corp_Ltd_150211.pdf - Presentation . Gives a very good breakup of what has been going on with sales and raw materials. |
Posted By: hit2710
Date Posted: 24/Mar/2011 at 8:09pm
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Any takers for Bajaj Corp? After posting a low of 367 the stock made a quick upmove and is now retracing some of its gains and seems to be remaining steady above the 430-432 levels.
Fundamentally I think company can do eps of around 30 per share for fy 11 and fy 12 might be better bcos there wont be IPO expenses to be written off. current market cap is around 1415 crores. If adjusted for the 280 crore sitting in cash, the market comes down further below 1200 crores and for a company doing net profit of close to 80-90 crores, this looks intersting.Promoter holding remains high so they might again dole out hefty dividend of around 20 per share which might amount to well above 4% dividend yield at cmp. Any views? ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |