Professional Documents
Culture Documents
August 2011
Industry Overview
8% salience
Others (10%)*
Hair Oil is > 55% of the overall hair care industry in India
2
6,000
(In KLtr)
172,528 Y-o-Y 16.8% Y-o-Y 6.7% Q-o Q 4.8% Y-o-Y 30% Y-o-Y 14%
(Rs. Cr.)
197,057
62,413
1,695
07-08
08-09
09-10
10-11
11-12 (3M)
06-07
07-08
08-09
09-10
11-12 (3M)
(Rs. Cr.)
6,169
(In KLtr)
Q-o--Q 16.5%
600 500 400 300 200 100 0 06-07 07-08 08-09 09-10 11-12 (3M)
Y-o-Y 6.1%
Y-o-Y15.1%
Y-o-Y 33%
Y-o-Y 18%
11764
237
06-07
07-08
08-09
09-10
10-11
11-12 (3M)
Light hair oils is one of the fastest growing segments in the hair oil market in India
3
18,390
19,516
(Rs. Cr.)
(In KLtr)
Q-o-Q 16.5%
Y-o-Y 6.1%
Y-o-Y15.1%
Y-o-Y 33%
Y-o-Y 18%
11764
6,169
237
200
100 0 06-07
06-07
07-08
08-09
09-10
10-11
11-12 (3M)
07-08
08-09
09-10
11-12 (3M)
Y-o-Y 19%
(In KLtr)
Y-o-Y 54.5%
Y-o-Y 48.9%
Y-o-Y 35%
Y-o-Y 15%
Q-o-Q 20%
Y-o-Y 51%
191
3,108
Y-o-Y 26%
5,988
Y-o-Y 23.5%
(Rs. Cr.)
300
284
129
0
06-07 07-08 08-09 Source: The AC Nielsen Retail Audit Report. 09-10 10-11 11-12 (3M)
0
06-07 07-08 08-09 09-10 11-12 (3M)
Almond Drops is the brand which is driving light hair oils and in turn the overall market
4
Volume MS
55% 50% 45% 40% 35% 30% 07-08 08-09 09-10 10-11 11-12 (3M) 38.4% 47.7% 49.1% 50.4% 60% 55% 50% 45% 40% 35% 30% 07-08 40.3%
Value MS
53.0% 54.2%
50.3%
46.5%
44.1%
08-09
09-10
10-11
11-12 (3M)
All India (U+R) Punjab Haryana Delhi Rajasthan Uttar Pradesh (U+R) Uttaranchal Assam Bihar Jharkhand Orissa West Bengal Gujarat Madhya Pradesh Chattisgarh Maharashtra Karnataka Andhra Pradesh Tamil Nadu Kerala
8.0
5.9 10.4 1.6 7.7 1.2 1.7 0.6 0.2
65.2
75.4 49.0 66.4 84.6 91.8 71.7 97.1 85.0
34.8
24.6 51.0 33.6 15.4 8.2 28.3 2.9 15.0
28.2
54.0 62.8 53.6 51.7 59.0 36.4 22.0 9.3
29.2
53.0 65.3 49.1 50.6 59.5 42.6 22.6 10.7
26.4
57.4 60.4 62.4 57.8 53.3 20.6 1.0
6
Traditional channels dominate distribution, but alternate channels like modern retail demonstrating higher growth rate
250ml, 1.7%
50ml, 17.9%
200ml, 20.4%
75ml, 4.9%
100ml, 39.0%
Given the dominance of the urban market, larger units account for bulk of the sales. However, smaller units to increase rural penetration
Sales tend to be concentrated in the Northern regions of the country which is also the fastest growing zone
Source: AC Nielsen 7
Company Overview
BCL is the exclusive licensee of brands owned by BCCL Brands licensed to BCL for 99 years from 2008
Market leader with over 54% market share* of LHO market Premium positioning commands one of the highest per unit prices in the industry
New Product Launch: Bajaj Kailash Parbat Cooling Oil Other brands - Brahmi Amla, Amla Shikakai and Jasmine (all hair oil brands) and Red / Black tooth powder
Bajaj Jasmine Hair Oil - A Jasmine flower perfumed hair oil. In demand due to cultural significance.
Bajaj Kala Dant Manjan An oral care product for the rural market.
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46.5% 40.3%
50.3%
53.0%
28
29
30
32
Comparative Price of Different Brands for 100 ml in the Hair Oil Segment
Competitor Brands
46 34 27 23 48 42 37 36 42 50
50 40 30 20 10 0
Parachute
Keo Karpin
Dabur Vatika
Dabur Amla
Navratna
Almond Drops has created a unique positioning for itself through initiatives like product differentiation (Almond based), focused marketing, unique packaging (glass vs. plastic used by competition etc.)
10
Age Group 15 to 39 yrs ( 59% of users) Urban Vs Rural 61% are Urban consumers Socio Economic Class (SEC)- Urban A1- 11% A2- 16% B1- 15% B2- 12%
Source - IRS
11
Distribution Structure
Factory (5)
OWN Himachal Pradesh -2, Uttarakhand-1 THIRD PARTY - Himachal Pradesh-1, Rajasthan-1
45
178
59
524
1288
125
418
280
324
559
139
339
404
192
Urban Distribution
Rural Distribution
218 221
MT - 44
Sub-Stockist (3970)
78
Over the years, BCL has created a large distribution network which can be leveraged to introduce new products
Organization Structure
Chairman Mr. Kushagra Bajaj
Vice Chairman Mr. R.F. Hinger
Director Sales & Marketing Mr. Sumit Malhotra
Sr. ManagerFinance
RSM North 1
RSM North 2
QC Manager
RSJM Central
13
Financial Information
Summary Income Statement
Particulars (In Rupees Crores) Sales (Net) EBITDA EBITDA Margin Net Profit after Tax* Net Profit Margin
Q1 2012 Q1 2011 2010-11 2009-10 404.85 21.95 418.21 -35.31 47.59 18.31 30.61 -1.33 376.31 21.97 396.06 -41.72 25.67 18.36 11.24 -3.93
* Net profit for 2010-11 is after exceptional items of Rs. 18.96 Crore (IPO expenses). Net profit for 2011 before exceptional item will be Rs 99.28 Crore
Key Highlights
Strong demonstrated growth track record Among the highest EBITDA margins in the industry The company has allotted 45 Lacs equity shares (face value Rs. 5) by means of an IPO in August 2010 at a price of Rs. 660 Consequently the paid up Equity share Capital and securities premium account have increased by Rs. 2.25 Crores and Rs. 294.75 Crores respectively Subsequently in May 2011 the shares of face value of Rs. 5/each were split into 5 shares of Re. 1/- each. Hence the total number of shares rose to 1475 lacs from 295 lacs Net Current Assets includes Provision for Dividend & Corporate Dividend Tax of Rs. 32.68 Crores.
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Particulars EBITDA Profit Before Tax (PBT) Profit After Tax (PAT)
2010-11 108.93
2009-10 97.74
YoY% 11.45%
105.08
84.10
101.56
83.91
3.47%
0.23%
15
EBITDA % of Sales
Other Income % of Sales
9.54 8.95%
0.02 0.47 35.65 0.00 35.65 7.23 28.42 26.66% 1.93
0.13 0.16%
0.02 0.44 28.36 0.00 28.36 5.65 22.71 27.79% 1.82 25.68% 25.68% 25.16%
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Sales Performance
Sales (Value) : Q1FY11 v/s Q1FY12
120 In Rs. Crores Cases (In Lacs) 100 80 60
40
20 0
81.71
106.58
6.81
8.17
Q1FY11
Q1FY12
Q1FY11
Q1FY12
Sales for the quarter ended Jun11 has increased by 30.44% value wise and 19.96% volume wise over corresponding quarter of previous year.
17
19.96%
30.44%
18
TOTAL
46.6%
100.0%
19
86.26
60
40
20 0 56.92
44.49
20
10 0
Q1 FY 11 v/s FY 12
FY 10 v/s FY 11
Q1 FY 11 v/s FY 12
FY 10 v/s FY 11
During the current quarter company faces major increase in the prices of its raw materials key ingredient namely LLP (Light Liquid Paraffin), Refined Oil . Price of LLP increased to Rs 86.26/Kg from Rs 56.92/Kg in Q1 FY11 i.e. an increase of 51.55%. This has adversely affected the overall profitability of the company. Prices of Refined oil for the Q1FY12 increased from Rs 49.92 per Kg to Rs 61.91 per Kg witnessing an increase of 24.02% over previous year. Prices of our other key ingredients (except glass bottles with 17% increase) have remained more or less on the same level.
20
Growth Strategy
Strategy
Market share gains from other hair oil segments
Action Steps
Convert coconut hair oil users to light hair oil users through sampling, targeted advertising campaigns, product innovation and creating awareness about product differentiation including communicating the advantages of switching to lighter hair oils. Aim for a market share of 65% by the year 2015-16 Tap the increase in disposable income of rural India and convert rural consumer from unbranded to branded products by providing them with an appropriate value proposition Among its key competitors, our Almond Drops is the only brand which is available in sachets a marketing initiative to penetrate the rural market BCL has over the years created a strong distribution network across 2.02 mn. retail outlets which can be optimally utilized by introducing new products BCL intends to extend Almond Drops platform developed by its Almond Drops Hair Oil brand to other personal care products to leverage on the strong connotation of Almonds with nutrition
Will seek inorganic growth opportunities in the FMCG and hair oil market as part of growth strategy The inorganic growth opportunities will focus on targeting niche brands which can benefit from BCLs strong distribution network so that they can be made pan India brands
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