Buy this small cap stock with a strong balance sheet and good dividends

Bajaj Consumer Care: renowned brands

This company manufactures and markets famous hair care brands such as Bajaj Amla, Bajaj Almond Drops, Bajaj Brahmi Amla, Bajaj Zero Gray Hair Oil, etc. In the skin care industry, the company owns such brands as Bajaj Nomarks Antimark Soap, Bajaj Nomarks Ayurvedics Antimarks Cream, etc. During fiscal year 2020-21, the company stepped up the presence and sales of its brands through the e-commerce channel. He has invested a lot in visibility; consumer offerings and search marketing for our brands on major e-commerce sites. As a result, Bajaj Consumer Care has seen its e-commerce sales increase by a factor of 3 compared to last year.

Bajaj Consumer Care: Good for dividend yields

Bajaj Consumer Care: Good on Dividend Yields

Bajaj Consumer Care has a good track record in paying dividends. Last year the company declared a total dividend of Rs 10 per share which, on the current market price of Rs 198, translates to a dividend of over 5%. The company also has a good amount of liquid assets in cash and liquid instruments, which makes the balance sheet quite strong.

The introduction of new products like Bajaj Amla Aloe Vera is expected to boost the company’s financial performance. Interestingly, the company is also a debt free company, with almost negligible debt on the books.

Bajaj Consumer Care: Buy the stock for good returns

Bajaj Consumer Care: Buy the stock for good returns

The company’s shares have been quite volatile and have gone from Rs 324 to Rs 197. At these levels, the downside risk of the stock is very low. In fact, if the markets are falling sharply, FMCG stocks can be a good place to hide.

For the quarter ending September 30, 2021, the company reported net sales of Rs 215.15 crore, down 4.51% from Rs. 225.30 crore in September 2020. Bajaj Consumer EPS declined to Rs. 3.20 in September 2021 from Rs. 3.88 in September 2020, as the margins of most companies in the sector were under pressure due to high raw material costs.

We believe the company can post an EPS of around Rs 15, in fiscal year 2022-23, as margins stabilize and new product launches contribute to profitability. This means that, even on a conservative basis, if you apply an ap / e 20 times, the stock should return to this level of Rs 300, which it was earlier.

A warning in the markets

A warning in the markets

Investors should exercise some caution in the markets, given that they have doubled from covid 19 lows seen almost 21 months ago. Only invest if you have a taste for risk.

Bajaj Consumer Care actions



Investing in stocks is risky, investors can do their own research before buying. Neither Greynium Information Technologies Pvt Ltd nor the author would be liable for any losses incurred based on any decision in the article.

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