Bajaj Corp Ltd - Reviews

[komal]

Aditya Birla Money has the following View on the IPO of Bajaj Corp Ltd,

The offering at the upper price band gives BCL a market capitalisation of Rs.19.5 bn. On market cap. to sales, it is valued at 5.9x FY10 net sales and on P/E basis, BCL is available at 23.2x and 22.1x FY10 earnings at upper price band and lower price band respectively (peerset average of 32.5x). Currently the company is dependent only on its flagship product “Almond Drops” for 92.4% of its sales, as compared to the well-diversified and established products of its peersets. Due to uncertainty associated with the new launches, we are of the opinion that the stock should trade at a discount of ~20% to its peerset. At the upper price band of Rs 660, the stock is available at a 28.6% discount to its peerset’s average P/E of 32.5x, which seems unwarranted. At a 20% discount to its peerset’s average P/E of 32.5x, the fair value for BCL comes to ~Rs 740 per share. Looking at the superior return ratios and smaller size of the issue, there may be marginal listing gains. We recommend investors with some risk appetite and a long-term investment horizon to subscribe to the issue.

[chetan]

Aditya Birla Promoter Kumarmanglam Birla's Sister is Married into the family of Bajaj Corp Promoters - Just thought of informing the general investors.

[komal]

Shivani Tandon from Unicon Research has the following recommendation,

At the upper price band of INR 660, the company is priced at 23.20x its FY10 EPS of INR 28.45 on a post issue basis. The issue is priced at a significant discount as compared to its peers, considering the growth opportunity in FMCG sector on back of growing rural demand and strong balance sheet of BCL, we recommend SUBSCRIBE to the issue for long term investment gains.

[komal]

HSBC InvestDirect has the following View,

Bajaj Corp Limited (BCL), part of the Shishir Bajaj group, was incorporated in April 2008. BCL is India’s third largest producer of hair oils and the largest producer of light hair oils. According to Nielson Retail Audit Report, it has captured an estimated 50.3% of the light hair oil market (based on value) in FY10. Bajaj Almond Drops, the flagship brand of the company, operates in the light hair oil segment and accounted for approximately 92.4% of its net sales in FY10. In addition, it markets its hair oil under the brand names Brahmi Amla, Amla Shikakai and Jasmine Hair Oil. It also produces oral care products under the brand name Bajaj Black Tooth Powder. BCL has a wide distribution network of 4,600 distribution stock points for direct distribution and 8,900 wholesalers for indirect distribution of its products.

At the price band of Rs 630–Rs 660 per share, the offer is available at PE of 22.1x-23.2x its FY10 post diluted EPS of Rs 28.5 per share. This is at a reasonable discount of approximately ~25% to its peers like Dabur India, Marico, and Godrej Consumer. Given the leadership position in the light hair oil segment, future diversification strategies, growth opportunities and strong promoter background, we recommend a Subscribe to the issue for the long-term horizon.

[komal]

Sushil Finance Analyst Dharmesh Shah has the following Report

Based on its FY10 EPS of Rs. 28.4 (on post issue diluted equity), at the high‐end (Rs. 660) of the price band, the issue is priced at 23.2x & at the low‐end (Rs. 630) of the price band, the issue is priced at 22.1x. Overall, considering its current market leadership in the high growth Hair Oil segment, new product introductions & strong distribution network, we believe the company will perform exceedingly well over the coming few years. While the issue pricing looks a bit on the higher side based on its FY10 numbers, considering its strong growth potential, we recommend our investor to subscribe in this offering.