Investor Presentation May 2011
Industry Overview
Industry Size and Structure FMCG Rs.116,100 cr (USD 24.8 bn) Hair Care 8% salience Rs. 9,200 cr (USD 2.0 bn) Shampoo Perfumed Oil Coconut Oil Hair Conditioners Hair Dyes Rs. 2,840 cr Rs. 2,900 cr Rs.2,100 cr Rs. 100 cr Rs. 1,200 cr (USD 600 mn) (USD 623 mn) (USD 448 mn) (USD 17 bn) (USD 253 mn) (31.0%)* (32.0%)* (23.1%)* (0.9%)* (13.0%)* Hair Oil Market Coconut based Heavy Amla Light Hair Oils Cooling Oils Others Oils based Oils (14%)* (12%) * (8%)* (51%)* (15%)* Perfumed Hair Oil Segment Source: The AC Nielsen Retail Audit Report. * Value based share of Hair Care Market Only branded products data for FY 09-10 Hair Oil is > 55% of the overall hair care industry in India
Hair Oil Market in India Overall Hair Oil Market – Volume Overall Oil Market – Value 300,000 7,000 5,862 245,655 6,000 250,000 4,971 210,374 197,057 5,000 4,498 200,000 (Rs. Cr.) 172,528 (In KLtr) 3,707 4,000 Y-o-Y 16.8% 132560 150,000 Y-o-Y 6.7% Y-o-Y 30% Y-o-Y 14% 2,827.3 Y-o-Y 10.5% Y-o-Y 17.9% Y-o-Y 31% Y-o-Y 21% 3,000 100,000 2,000 50,000 1,000 0 0 06-07 07-08 08-09 09-10 10-11 06-07 07-08 08-09 09-10 10-11 Light Hair Oil – Volume Light Hair Oil – Value 25,000 900 833 22,464 800 19,516 696 18,390 20,000 700 610 15,603 600 (Rs. Cr.) 15,000 472 (In KLtr) 11764 500 Y-o-Y 6.1% Y-o-Y15.1% Y-o-Y 33% Y-o-Y 18% 400 335.6 10,000 Y-o-Y 19.7% Y-o-Y 40% Y-o-Y 29% Y-o-Y 14% 300 5,000 200 100 0 0 06-07 07-08 08-09 09-10 10-11 06-07 07-08 08-09 09-10 10-11 Source: The AC Nielsen Retail Audit Report. Light hair oils is one of the fastest growing segments in the hair oil market in India
Light Hair Oil Market in India Light Hair Oil – Volume Light Hair Oil – Value 900 833 25,000 22,464 800 696 19,516 18,390 700 20,000 610 15,603 600 (Rs. Cr.) 472 15,000 500 (In KLtr) 11764 Y-o-Y 6.1% Y-o-Y15.1% Y-o-Y 33% Y-o-Y 18% 400 335.6 Y-o-Y 19.7% Y-o-Y 40% Y-o-Y 29% Y-o-Y 14% 10,000 300 200 5,000 100 0 0 06-07 07-08 08-09 09-10 10-11 06-07 07-08 08-09 09-10 10-11 Almond Hair Oil Market - Volume Almond Hair Oil Market - Value 12,000 500 11,021 441 450 9,300 10,000 400 350 8,108 350 8,000 284 Y-o-Y 19% 300 (In KLtr) 5,988 (Rs. Cr.) Y-o-Y 54.5% Y-o-Y 48.9% Y-o-Y 23.5% Y-o-Y 35% Y-o-Y 15% Y-o-Y 26% 6,000 Y-o-Y 51% 250 191 3978 200 4,000 123 150 100 2,000 50 0 0 06-07 07-08 08-09 09-10 10-11 06-07 07-08 08-09 09-10 10-11 Source: The AC Nielsen Retail Audit Report. Almond Drops is the brand which is driving light hair oils and in turn the overall market
Market Shares Trends (All India - Urban Plus Rural) Volume MS Value MS 55% 55% 53.0% 50.3% 49.1% 50% 50% 47.7% 46.5% 44.1% 45% 45% 40.3% 40% 38.4% 40% 35% 35% 30% 30% 07-08 08-09 09-10 10-11 07-08 08-09 09-10 10-11 *Market Share in the Light Hair Oil Category Source: The AC Nielsen Retail Audit Report.
Statewise Market Share LHO Volume Proportion ADHO Market Share (Vol) Apr10-Mar11 Saliency Urban Rural Total Urban Rural 67.4% 32.6% 49.1% 47.0% 53.2% All India (U+R) 6.0% 69.6% 30.4% 41.7% 40.1% 45.5% Punjab 5.2% 83.2% 16.8% 46.7% 43.4% 62.8% Haryana 7.3% 100.0% 42.4% Delhi 9.5% 66.2% 33.8% 49.0% 47.2% 52.7% Rajasthan 20.3% 60.1% 39.9% 52.9% 49.5% 58.0% Uttar Pradesh (U+R) 1.1% 55.3% 44.7% 59.6% 59.3% 59.9% Uttaranchal 6.5% 40.4% 59.6% 44.3% 39.2% 47.8% Assam 5.2% 58.0% 42.0% 63.2% 59.0% 69.0% Bihar 1.2% 68.7% 31.3% 43.3% 43.8% 42.2% Jharkhand 1.2% 78.7% 21.3% 35.9% 36.9% 32.3% Orissa 8.1% 64.3% 35.7% 28.4% 29.4% 26.6% West Bengal 5.8% 75.4% 24.6% 55.4% 54.3% 58.9% Gujarat 10.0% 51.1% 48.9% 63.4% 64.8% 61.8% Madhya Pradesh 1.5% 69.7% 30.3% 54.9% 51.6% 62.3% Chattisgarh 7.4% 84.1% 15.9% 50.8% 49.8% 55.9% Maharashtra 1.1% 92.4% 7.6% 58.8% 58.9% 57.1% Karnataka 1.7% 71.7% 28.3% 36.2% 42.4% 20.3% Andhra Pradesh 0.6% 96.0% 4.0% 21.1% 22.0% Tamil Nadu 0.2% 83.8% 16.2% 8.9% 10.6% Kerala Source: The AC Nielsen Retail Audit Report.
Light Hair Oil Market – Key Characteristics Rural – Urban break up of LHO market Share of Distribution Channels in LHO market – FY10 Modern Trade (11% ) Others (11% ) 2.0% 6.0% Traditional Cosmetics (0% ) channels dominate 5.0% distribution, but Rural Urban dominated alternate channels Chemists 33.0% segment due to its (10% ) like modern Local Grocery Urban relatively higher 7.0% retail, ‘paan Stores (6% ) cost 67.0% shops’ etc 50.0% Gen Stores demonstrating (6% ) higher growth 30.0% rates (%) – Growth rates; % - Market share SKU wise break up of LHO market Region wise break up of LHO market 500 ml 2-5 ml South 2.0% 0.0% 20-45 ml 4.0% 300 ml 1.0% Given the 9.0% dominance of the Sales tend to be urban concentrated in 50 ml West 18.0% market, larger the Northern 22.0% 200 ml 75 ml units account for regions of the 21.0% 5.0% North bulk of the sales. country which is 52.0% However, smaller also the fastest East units to increase growing zone 100 ml 22.0% rural penetration 44.0% Source: AC Nielsen
Company Overview
Bajaj Corp Ltd. (BCL) – An Overview Part of Bajaj Group which has business interests Bajaj Almond Drops Hair Oil - A premium perfumed in varied industries including sugar, consumer hair oil containing almond oil and Vitamin E goods, power generation & infrastructure Competitors – Keo Karpin ( Dey’s Medical), Hair & Care (Marico), Clinic All Clear (HUL) development Subsidiary of Bajaj Consumer Care Ltd. (BCCL) Bajaj Kailash Parbat Cooling Oil – An ayurvedic formulation containing Sandal & Almond extracts BCL is the exclusive licensee of brands Competitors: Himani Navratna owned by BCCL Brands licensed to BCL for 99 years from Bajaj Brahmi Amla Hair Oil - Traditional heavy hair 2008 oil. Brand has been in existence since 1953 3 rd largest player in the overall hair oils segment Competitors - Dabur Amla, Dabur Sarson Amla Key brand – Bajaj Almond Drops Hair Oil Bajaj Amla Shikakai – Variant in the heavy hair oil Market leader with over 50% market share* segment catering to price conscious consumers of LHO market Competitors - Shanti Badam Hair Oil (Marico) Premium positioning commands one of the highest per unit prices in the industry Bajaj Jasmine Hair Oil - A Jasmine flower perfumed New Product Launch: Bajaj Kailash Parbat hair oil. In demand due to cultural significance. Cooling Oil Other brands - Brahmi Amla, Amla Shikakai and Jasmine (all hair oil brands) and Red / Black Bajaj Kala Dant Manjan – An oral care product for the rural market. tooth powder *Source: The 2009 AC Nielsen Retail Audit Report.
Bajaj Almond Drops - A Premium Brand Strong Market Share Growth in Recent Years . . . But not at the cost of pricing power 60% 50 46 53.0% 50.3% 42 45 40 46.5% 38 50% 40 35 40.3% 32 35 36.7% 30 40% 29 28 31.4% 30 30% 25 20 20% 15 10 10% 5 0% 0 05-06 06-07 07-08 08-09 09-10 10-11 Mar-03 Mar-05 Dec-05 Jul-06 May-08 Jul-08 Jan-10 May-10 Apr-11 70 Comparative Price of Different Brands for 100 ml in the Hair Oil Segment Competitor Brands 60 50 48 50 46 (MRP of 100ml (Rs.) 38 37 40 36 34 34 27 30 23 20 10 0 Amla Shikakai Brahmi Amla Almond Drops Kailash Parbat Parachute Keo Karpin Dabur Vatika Dabur Amla Hair & Care Navratna Almond Drops has created a unique positioning for itself through initiatives like product differentiation Source: The AC Nielsen Retail Audit Report, Kotak Institutional (Almond based), focused marketing, unique packaging (glass vs. plastic used by competition etc.) Research
Consumer Profile- Almond Drops For Almond Drops the consumer is: Gender — Male- 54% Female- 46% 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
Strong Distribution Network Distribution Network Distribution Structure Factory (5) The company reaches consumers through 1.95 mn OWN – Himachal Pradesh -2, Uttarakhand-1 retail outlets serviced by 44 THIRD PARTY - Himachal Pradesh-1, Rajasthan-1 5653 direct distributors and 9,900 wholesalers 56 180 Central Warehouse (1) 127 1267 271 Regional Distribution Centre (32) 552 388 124 553 338 316 133 189 Urban Distribution Rural Distribution 404 Super Stockist (156) MT - 46 214 Redistribution Stockist (1,996) 235 Sub-Stockist (3657) 84 Retail Outlets ( 961,099 ) 1 Retail Outlets ( 989,116 ) 1 1 - as on Mar. 31, 2011 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 President Operations Mr. Sumit Malhotra Mr. Apoorv Bajaj CFO GM – Sales GM – Marketing GM- HR Mr. Dilip Maloo Mr. Sudhir Taneja Mr. Gurpreet S. Amrit Mr. S. Chatterjee Company Sr. Manager DGM – Finance DGM – Finance DGM Sales Secretary Treasury Sr. Manager Sr. Manager- AGM- West Finance Finance Works Sr. Manager- RSM – North 1 Manager EDP Purchase Manager- RSM – North 2 Manager Logistics Regional RSJM Central Commercial QC Manager Managers
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