How Bajaj Consumer Care is defying an FMCG slowdown
Mumbai: While the broader FMCG industry struggles with high input costs and muted volume growth, Bajaj Consumer Care Ltd is pulling ahead of its peers. The maker of Bajaj Almond Drops hair oil posted over 25% revenue growth for four straight quarters, including the September quarter of FY27. Its shares have rallied nearly 63% year to date against an 18% decline in the Nifty FMCG index, highlighting a sharp performance disconnect. Even with this rally, the stock trades at a price-to-earnings (P/E) multiple of 23.28, a discount to the Nifty FMCG index's valuation of 30.87. To be clear, with a market capitalization of ₹5,635 crore, the company is not part of the Nifty FMCG index.
Almond hair oil contributes roughly 80% of total revenue, but the company is taking steps to curb this reliance. A revamped distribution network, strict cost discipline, and portfolio diversification have fueled its expansion despite broader sector headwinds. In FY26, the company crossed the ₹1,000-crore milestone as consolidated revenue from operations grew 21.4% to ₹1,153.4 crore, while consolidated profit after tax surged 51.8% to ₹190.2 crore. The bottom-line momentum accelerated into the second quarter of FY27, with net profit surging 66% year-on-year to ₹70.2 crore.
“In the long term, we want to aspire for double-digit growth,” managing director Naveen Pandey said during the company’s analyst call in October. “For the year, we are expecting high teens.”
Small packs, calibrated hikes
One factor supporting growth is the enduring strength of low-price-point packs. The company sells almond oil starting at ₹2, making it one of the rare mainstream FMCG players to maintain this entry price. While such packs generate less than 20% of Bajaj Consumer Care’s revenue, they allow the brand to connect with consumers hesitant to spend more in a single transaction.
To protect profitability, Bajaj Consumer Care implemented calibrated price increases on larger packs during the April-June quarter while reducing pack sizes at lower price points. It now plans a fresh round of adjustments combining price hikes with quantity cuts.
In October, as the company mapped out its next round of pricing action, Pandey explained that consumer prices would rise by about 5%. He said this increase would be split almost evenly between a direct price hike of 2-3% and a similar contribution coming from reductions in pack volume. The Almond Drops hair oil portfolio delivered over 10% volume growth in the second quarter.
“Raising the price usually leads consumers to resist the increase or switch to cheaper local, unorganized brands,” Manoj Menon, head of institutional research at ICICI Securities, said about the lower price points. “Passing on a 5% price increase while maintaining sales volumes will depend on slightly reducing pack size or quantity instead of changing these important price points,” he added.
The strategy is helping margins recover. Bajaj Consumer Care’s earnings before interest, taxes, depreciation and amortisation (Ebitda) margin rose to 25% in the second quarter FY27 from 18.6% a year earlier.
Overhauling the distribution engine
The turnaround is built on Project Aarohan, launched in the first quarter of FY25. By focusing on expanding its direct distribution network, the company added over 1,100 distribution partners across 100,000 outlets. Markets covered by Aarohan generated 200-300 basis points of additional growth compared to other regions.
To strengthen its go-to-market strategy in south India, the company plans to leverage Banjara’s focus on southern markets through Project Vridhi, aiming to reach more than 100,000 outlets in the region.
This distribution push helped the company deliver growth in the high twenties across organized trade in Q2. “Strong growth in organised trade-especially quick commerce-along with a recovery in general trade and double-digit international growth helped the company gain market share and deliver broad-based growth,” Menon said.
"Quick commerce continued its scale up and remains the fastest-growing sub-channel for us." Pandey said in the October analyst call.
Management also highlighted “very strong savings” in employee and fixed costs during Q2 FY27, which helped offset gross-margin pressures and support the Ebitda margin.
Building a second engine
Diversification forms the second pillar of the strategy. In February 2025, the company acquired Vishal Personal Care Pvt. Ltd., owner of skincare brand Banjara’s, for about ₹120 crore. “You will see us doubling down on Banjara’s portfolio where we believe we have a significant scaling opportunity,” Pandey said during an analyst call in April.
The company is also broadening its existing range of coconut oil, henna, rose water, amla oil, and hair masques, including products under Natyv Soul and Banjara’s. As of March 2026, this combined growth portfolio was generating about ₹225 crore in annual revenue, with management stating in March that it aims to scale this to ₹500 crore over the next three years.
The stock, however, has declined 15% over the past month, suggesting that investors remain alert to the risks ahead.
Indeed, stronger operational execution does not ensure continuous margin expansion. “BCCL remains exposed to fluctuations in key raw materials such as LLP, copra, mustard oil, high-density polyethylene and packaging materials,” rating agency Crisil noted in an August 2026 report, adding that “elevated input cost and high-cost inventory may exert pressure on the gross margin in the near term”.
At the end of FY26, the company had a net cash accrual of ₹206 crore, zero debt, and a surplus of around ₹409 crore, including investments in marketable securities. "These savings give the company enough room to maintain healthy spending on advertising and promotions, while directing more investment towards digital platforms, connected TV, influencer-led marketing and quick commerce," Menon said.