MAM

Q1-2016: Bajaj Corp marketing spends up 33%

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BENGALURU: Bajaj Corp Limited spent Rs 40.60 crore (18.5 per cent of Operating Revenue or Total Income from Operations or TIO) in the quarter ended 30 June, 2015 (Q1-2016), which was 33 per cent more than the Rs 30.53 crore (16 per cent of TIO) in the corresponding quarter of the previous year and almost flat (less by 0.8 per cent) as compared to the Rs 40.92 crore (17.3 per cent of TIO) in Q4-2015. Please refer to Fig A below.

Note:

(1) Bajaj Corp?s Limited (Bajaj Corp) Advertisement and Sales Promotion (ASP) expense comprises of two parts ? Advertisement Spends and Sales Promotion Spends. The ASP figures have been obtained from the Company?s investors? presentations over various quarters and the Ad Exp from its financial results. Sales Promotion results have been obtained by deducting the Ad Expenses from the ASP. The figures in the investors? presentations have been rounded off by the company and hence are assumed as approximate. Consequently the Sales Promotion 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) 100,00,000 = 100 lakh = 10 million = 1 crore

Marketing Expenses

The company?s Ad spends in the current quarter at Rs 15.28 crore (seven per cent of TIO) was 16 per cent more than the Rs 13.17 crore (6.9 per cent of TIO) in Q1-2015 and 0.9 per cent more than the Rs 15.15 crore (6.4 per cent of TIO) in Q4-2015. 

Bajaj Corp?s Sales Promotion spends in Q1-2016 at Rs 25.32 crore (11.6 per cent of TIO) was 45.8 per cent more than the Rs 17.36 crore (9.1 per cent of TIO) in Q1-2015 and was 1.75 per cent lower than the Rs 25.77 crore (10.9 per cent of TIO) in the immediate trailing quarter.

During the fourteen quarter period starting Q4-2012 until Q1-2016 (current quarter), Bajaj Corp?s ASP has been the highest in terms of absolute rupees in the previous quarter (Q4-2015) at Rs 40.92 crore (17.6 per cent of TIO).  The company?s highest ASP during the period under consideration in terms of percentage of TIO was in Q3-2015 at 19.6 per cent of TIO (Rs 40.24 crore). The lowest ASP during the period under consideration in terms of absolute rupees as well as percentage of TIO was in Q1-2013 at Rs 17.36 crore and 12.6 per cent of TIO.

Bajaj Corp?s highest Ad spends in absolute rupees during the period under consideration was in Q3-2015 at Rs 17.56 crore (8.5 per cent of TIO), while the highest Ad spends in terms of percentage of TIO was in Q1-2014 at 8.8 per cent (Rs 14.98 crore).

The company?s highest Sales Promotion spends in terms of absolute rupees during the period under consideration was Rs 25.77 crore(10.9 per cent of TIO) in the previous quarter, while the highest Sales Promotion spends in terms of percentage of TIO was in Q3-2014 at 12.4 per cent (Rs 19.70 crore).

During the fourteen quarter period under consideration, both ASP and Sales Promotion spends show a linear increasing trend in terms of percentage of TIO, while Ad spends in terms of percentage of TIO shows a slight declining trend.

Revenue, profits

Bajaj Corp TIO in Q1-2016 at Rs 219.1 crore was 14.5 per cent more than the Rs 191.32 crore in Q1-2015, but was 7.2 per cent lower than the TIO in Q4-2015 at Rs 236.17.

Profit after Tax (PAT) in Q1-2016 at Rs 47.51 crore (21.7 per cent of TIO) was 19.9 per cent more than the Rs 39.62 crore (20.7 per cent of TIO) in Q1-2015 but was 12.7 per cent lower than the PAT in Q4-2015 at Rs 54.42 crore (23 per cent of TIO). PAT in the previous quarter was the highest in absolute rupees during the period under consideration. PAT in terms of percentage of TIO was highest at 28.5 per cent (Rs 42.20 crore) in Q3-2013.

During the fourteen quarter period under consideration, both TIO and PAT in absolute rupees show a linear increasing trend, while PAT in terms of percentage of TIO shows a linearly declining trend.

Brands

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.

Market Share of Hair Oils

The company is a market leader in the light hair oil and the almond drop hair oil categories in India as per its investor presentation. Bajaj Corp claims a market share in the country of 58.9 per cent in terms of volume Q1-2016, same as the market share in FY-2015 in the light hair oil category. In value terms the company claims a 60.9 per cent, up 20 basis points as compared to the 60.7 per cent during fiscal 2015. On an all India basis, Bajaj Corp reports proportion of 62.8 per cent urban market share and a 37.8 per cent rural market share for light hair oil in terms of volume.

In the previous fiscal, the company?s market share had improved by 100 basis points in terms of volume from the 57.9 per cent in FY-2014. In value terms, the company?s market share had increased 120 basis points as compared to the 59.5 per cent in FY-2014.

Light hair oil category in India has grown by 6.9 per cent in volume and has grown by 10.2 per cent in value Q1-2016 as compared to the corresponding year ago quarter.

In the Almond drop hair oil category, the company claims an urban market volume share of 59 per cent in the country with an urban/rural market share of 56.5 per cent and 63.1 per cent respectively. Growth rates for the current period for almond drop hair oil have not been mentioned by the company in its investor presentation for Q1-2016.

Click here to read unaudited financial results

Click here to read investor presentation 

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