Q1-2015: Bajaj Corp ad and sales promo spend up 7 per cent

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By Tarachand Wanvari Posted on : 04 Aug 2014 12:23 pm

BENGALURU:  Note: (1) Bajaj Corp’s  Advertisement and Sales Promotion (ASP) expense comprises  two parts – Advertisement (AdSp) and Sales Promotion (SPSp). The ASP figures have been obtained from the Company’s investors’ presentations over various quarters and the Ad Exp from its financial results. SP results have been obtained by deducting the Ad Exp from the ASP Exp. The figures in the investors’ presentations have been rounded off by the company and hence are assumed as approximate. Consequently the SP figures are assumed to be approximate.

(2) Bajaj Corp Limited is a subsidiary of Bajaj Resources Limited (BRL) and is an exclusive licensee of the brands owned by BRL for a period of 99 years starting 2008.

(3) Rs 100 lakh = Rs 100,00,000 = Rs 1 crore = Rs 10 million.

Bajaj Corp spent Rs 30.53 crore (15.8 per cent of total income from operations or TIO) towards advertising and sales promotion (ASP) in Q1-2015, which was 7 per cent more than the Rs 28.54 crore (15.5 per cent of TIO) in the immediate trailing quarter and also 7 per cent more than the year ago quarter Q1-2015’s Rs 28.53 crore (16.8 per cent of TIO). Over 10 quarters starting Q4-2012 until Q1-2015, Baja Corp’s ASP shows an upward linear trend in rupee terms, with Q1-2015 registering the highest amount of ASP spend.

In terms of percentage of TIO also, Bajaj Corp’s ASP shows a linear upward trend over the 10 quarters under consideration.  However, the highest ASP in percentage of TIO terms was in Q3-2014 at 17.9 per cent. Please refer to

In terms of percentage of TIO as well as rupee terms, the company’s AdSp in Q1-2015 at Rs 13.17 crore (6.9 per cent of TIO) was 28.7 per cent more than the Rs 10.23 crore (5.5 per cent of TIO) in Q4-2014, but was 12.1 per cent lower than the Rs 14.98 crore (8.8 per cent of TIO) in Q1-2014.

Bajaj Corp’s SPSp in Q1-2015 at Rs 17.36 crore (8.9 per cent of TIO) was 5.2 per cent lower than the Rs 18.31 crore (9.9 per cent of TIO) in Q4-2014 and was 28.2 per cent more than the Rs 13.55 crore (8 per cent of TIO) in Q1-2014.

Bajaj Corp’s Q1-2015 TIO at Rs 191.32 crore is the highest reported across the 10 quarters under consideration. Q1-2015 TIO was 3.7 per cent more than the Rs 184.13 crore in Q4-2014 and was 12.4 per cent more than the Rs 170.23 crore in Q1-2014.

Since Q1-2014, Bajaj Corp’s PAT has shown a downward trend, from a peak value of Rs 49.16 crore (26.7 per cent of TIO) in Q4-2013. In Q1-2014, the company’s PAT at Rs 47.01 crore though lower was higher in terms of percentage of TIO at 27.6 per cent because of lower TIO in that quarter.

However, the downward PAT trend across the three quarters – Q1-2014, Q2-2014 and Q3-2014 seems to have reversed. In Q4-2014, the company’s PAT was Rs 38.31 crore (20.8 per cent of TIO). In the current quarter Q1-2015, PAT was higher by 3.4 per cent at Rs 39.62 crore (20.7 per cent of TIO) as compared to Q4-2014, was 15.7 per cent lower than the year ago Q1-2014 PAT of Rs 47.01 crore (27.6 per cent of TIO).

Bajaj Corp’s mother brand is Bajaj with sub brands/products such as Bajaj Almond Drops Hair Oil, Bajaj Kailash Parbhat Cooling Oil, Bajaj Brahmi Amla Hair Oil, Bajaj Amla Shikakai, Bajaj Jasmine Hair Oil, Bajaj Kala Dant Manjan, and creams, soaps, face washes and face scrubs under the brand name Nomarks.

The company had earlier announced that it was focussing on rural penetration to tap the increase in disposable income of rural India and to convert rural consumers from unbranded to branded products by providing them with an appropriate value proposition. The initiative seems to be working.  In its investor presentation for Q1-2015, Bajaj Corp says that in Q1 FY 15 its Bajaj Almond Drops Hair Oil got 39.9 per cent of its sales from rural India.  The company reports volume growth in rural India by 4.4 per cent (Urban + Rural = {-2.7} per cent, hence showing a decline in the urban market) and claims a market share in rural India of 63.5 per cent (urban + rural = 58.5 per cent).

Click here to read investor presentation

Click here to read full financial report

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