Introduction

Bajaj Almond Drops is the key brand in the kitty of Bajaj Corp Ltd and is the leading brand in the light hair oil category. It is Indias most premium hair oil brand. In the years to come it should be a player to reckon with in the hair care business. Today Bajaj Almond Drops is the fastest growing brand in the hair oil category growing in double digits yearon-year. It is already the largest brand in the light hair oil category and currently owns a major share of this market. Being a light, non-sticky hair oil, it provides the nourishment without making you look Chipku. Made from real Almond extracts, Bajaj Almond Drops has 300% more Vitamin - E than coconut oil which helps nourish the hair roots and makes them strong and healthy. Apart from this, the Almond extracts absorbed by the hair helps maintain the moisture thus leaving your hair incredibly fresh and soft while naturally bringing out the beauty of hair. Todays youth prefers Bajaj Almond Drops as it fulfills the dual benefit of do-good due to the almond nourishment and look-good because of its Non-Sticky feel. Thus giving you ease of styling. It comes in a unique glass bottle which helps to retain the aroma, the essential qualities of Almond extract & Vitamin E. It is available in convenient packs of 300ml, 200ml, 100ml, 75ml, 50ml, 20ml and 3ml sachet.

Almond oil is one of the richest sources of vitamin E. Almond oil is an excellent moisturizer. Its great for your your hair. It nourishes and softens the skin. It also conditions the skin no matter how mature your skin is. Almond oil helps the skin stay healthy and youthful. Almond oil gets absorbed in the quickly, thus will not feel oily on skin after application like other vegetable oils and it can be easily used for oily and combination skin.

hat it says? It fulfills the dual benefit of do-good due to the almond nourishment and look-good due to being a Non-Sticky hair oil. Thus gives you the ease of styling. Being a light, non-sticky hair oil, it provides the traditional do-good benefits of nourishment without having the biggest negative attached to a hair oilstickiness. With real Almond extracts, Bajaj Almond Drops has 300% more Vitamin E than coconut oil which helps nourish the hair roots and makes them strong and healthy. Key Ingredient s : Mineral Oil, Vegetable oil, perfume, sweet almond oil, vitamin E How to use it ? For hair

Apply almond oil 2-4 hours before your shampoo your hair, and hair will be shinier and smoother after washing. Almond oil not only promotes hair growth but also nourishes hair to a high extent. It controls hair fall and makes hair stronger.

For face

If massaged on face for 10-15 minutes in circular motion, it will improve blood circulation and most certainly will give you a clearer complexion. Tried it and tested by moi.

Almond oil when applied on face helps get rid of dark circles. It is useful for delaying ageing process. Apply on delicate areas like under eyes and side of your eyes, it will help prevent wrinkles crows feet. It can be used for skin rashes, skin irritation and inflammation and chapped lips. Apply it on your eyebrows along with castor oil and olive oil, it will help you grow thicker eyebrows. (or so they say) In short use it as a night cream, its nourisher + moisturizer + corrector in one.

For body

Almond oil is especially helpful in the winter, when skin becomes dry and rough. Apply almond oil on face, neck and hands every night before you go to sleep, you are 100 % sure to wake up with a glowing face and body. Dont fret about being oily all night, almond oil gets absorbed into the skin within 30 minutes. At the end of the day, rub heated almond oil on your hands and feet, including the sole, to relax and rejuvenate them. This will help moisturize the tough skin, and give you softer, smoother skin.

Pros

Its light, non sticky, gets absorbed in the skin fast (but not if you use ridiculous quantities,3-4 drops are enough) Smells great A good alternative to regular coconut oil Priced well, comes in a lot of sizes It advertises for hair nourishment, but I find it does less to hair than face, it works grrrrrreat for my face and body

Cons

Odour is strong, if youre one of those who dont like strong odours plus it smells nothing like almonds Glass bottle prone to breakage (oil + glass = :pig: :pig: )

Bajaj Corp plans to extend the hair-oil company into other personal care categories. Can it take on wellentrenched rivals? When the Bajaj brothers, Rahul and Shishir, split their business in 2008, the sugar business, under Bajaj Hindusthan, went to Shishir Bajaj. It is the countrys largest sugar producer more than double in size of its nearest rival. The business is driven by Shishir Bajajs elder son, Kushagra.

Those who know him well will tell you that his appetite for growth is far from satiated. Some big ticket acquisitions could happen in the days to come. Click here for Cloud Computing Also Read Related Stories News Now

- 100 crorepatis in Rajya Sabha; Rahul Bajaj richest - Bajaj Holding ups stake in Force Motors to over 19% - Bajaj Holdings raises stake in Bajaj Electricals - Bajaj Holdings hikes stake in Bajaj Electricals to 31.65% - Bajaj family to raise stake in BHIL - Bajaj Corp files for IPO of 4.5 mn shares Also Read News Related Stories Now Markets shed gains post Jan IIP data Govt won't allow fresh cotton exports Ahead of Budget, armed forces asked to return Rs 4,000 cr Govt unveils five-point blueprint Budget 2012: Fiscal discipline will suffice, says Angel Broking

More In addition, father and son own and run Bajaj Corp. The closely-held hair oil company is a hidden gem. In 2008-09, it did a business of Rs 244 crore with a gross profit margin of 62 per cent and net profit margin of almost 20 per cent! The return on capital employed, at last count, was 188 per cent. Its Almond Drops is the largest brand in the fragrant hair oil market with a share of 51 per cent. It is the third-largest hair oil brand in the country after Maricos Parachute and Dabur Amla. This seems to have fuelled Kushagra Bajajs ambitions for the fast-moving consumer goods business. Sector experts expect Bajaj Corp to get into soaps, skincare, shampoos and other hair oils in the near future. Bajaj Corp is tightlipped about the new product lines. But it has filed a draft red herring prospectus with the Securities and Exchange Board of India for a public issue. This is where growth capital will come from. The IPO will take the company to the next orbit. The personal care space in FMCG is far from saturation. We hope to tap that, says Kushagra Bajaj.

Bajaj Corps strength is that it runs a tight ship. The company claims it has one of the lowest cost ratios in the industry. It is an asset-light business with low overheads. People costs are kept at a minimum with a lean team. Higher numbers of distributors salesmen in the sales team cut costs up to a third for the company. The challenge is to rein in raw material costs. Bajaj Corp Vicepresident RF Hinger says: Forward buying in liquid paraffin and bulk deals for packaging material and vegetable oils for every quarter help keep our costs in check. Also, unlike pure oils, Bajaj can price Almond Drops, which is scented and comes with added ingredients, at Rs 38 per 100ml, much higher than coconut oil which sells at Rs 21 per 100 ml. Only cooling oil (Himani Navratna and others) retails for more at around Rs 44 for 100 ml. The company operates three factories in Uttarakhand and Himachal Pradesh and hence gets substantial tax breaks. It reaches 1.5 million retail outlets in the country. Challenges ahead Is this good enough for Bajaj Corp to get into new categories? The challenges are huge. One, expansion into soaps, shampoos and skincare will bring Bajaj Corp face to face with the might of multinational corporations like Unilever and Procter & Gamble. Hair oil, as it happens, is a uniquely South Asian product. As a result, it does not fit into the global product development plan of most multinationals. Thats why the Indian market is ruled by homespun companies like Marico (coconut oil), Dabur (amla oil), Bajaj Corp (fragrant oil) and Emami (cooling oil). Two, Kushagra Bajaj has so far proved his mettle in sugar which is a commodity business; brands are a different ball game. Bajaj Corp, for instance, spent only Rs 18 crore in 2008-09 on advertising. On a turnover of Rs 244 crore, this works out to a little over 7 per cent of turnover. This is way below the 13-15 per cent norm in the FMCG business. Also, Bajaj Corp is largely a single brand company. Though it also has amla and jasmine hair oil as well as a tooth powder, almost 90 per cent of its business is Almond Drops. But this could change in the days to come. The draft red herring prospectus, which lists the products for launch as 1, 2, 3 and 4, puts down the marketing budget for 2011 at a total of Rs 60.7 crore for the four products. That would be almost 20 per cent of its earning, should it continue with a 22 per cent growth rate. For marketing, the top ten soap brands spend around Rs 600 crore in advertising every year. If we have to make noise, we need to have a similar budget. We will need at least 10 per cent share of the voice, says Bajaj Corp Director (sales & marketing) Sumit Malhotra. This is where the IPO money will come in handy. Some developments suggest that the company is ready to step on the gas. It has signed on Lara Dutta for a new campaign. For its southern market, it has Ramya, the Kannada actor, advocating the oils nutrition and protection quotients. A brand strategy is also in place. We have identified categories in personal care in which we could extend Almond Drops. Segments in which we cant, we will look to acquire brands or launch new ones, says Malhotra. Bajaj Corp claims it has zeroed in on companies to acquire. For now, these would be brands that Bajaj Corp can retail through its existing system for better profitability through synergies. We would be saving up to 5-7 per cent distribution costs that way, says Malhotra. Its attempts at acquiring brands over the last two years did not meet with success. Naturally, it is reticent to delve into its current prospects. Bajaj Corp plans to divide the

market into four zones for launch of its four products. We looked at the kind of distribution we had. We were strong among grocers, so we could flop in launching a chemist-led product, says Malhotra. Both extensions and new products would need to start in the markets the company is strong in North, West and East. In the South, the company will work towards increasing the brand recall of Almond Drops. Within hair oils, it is important for Bajaj Corp to get into new categories. Nielsen puts the branded hair oil market at Rs 4,943 crore and growing at 13 per cent. Of this, coconut oil is 52 per cent, amla 15 per cent, light or fragrant hair oil 14 per cent and cooling hair oil 12 per cent. If it wants to expand, Bajaj Corp cannot ignore the other categories. While the company is tightlipped about its plans, market observers say that cooling oil could be next on the companys radar. It is strong in the Hindi-speaking belt where cooling oil has a strong hold. Cooling oil is also priced higher than regular hair oils, in the same range as Bajaj Almond Drops, says Technopak Advisors Associate Vice-president Purnendu Kumar. This segment has been growing at over 20 per cent per annum. Crowded space Emami Director Harsh Agarwal does not seem too bothered: Our brand is strongly entrenched in the market, which makes it difficult for newcomers to carve a niche for themselves. He adds that Marico and Dabur have both backed off from the segment. The brand is fortified with Shah Rukh Khan and Amitabh Bachchan as brand ambassadors. Malhotra, on his part, rules out an entry into coconut oils for now. But he is confident that the brand equity of Almond Drops will fetch him customers in other categories as well. The name of the game is conversion. You have to convert the person from the hair oil he or she is currently using. For us, it has to be other branded oil because of the premium pricing of Almond Drops. he says. This is easier said than done, say rivals. Hair oil is bought largely by women who happen to be very loyal towards the brands they consume, and it takes a lot of persuasion to change their preferences. Meanwhile, attracted by Almond Drops domination of the fragrant hair oil market, rivals have entered the segment. Marico with its Hair & Care light hair oil and Dabur with its Vatika are the latest entrants to the almond hair oil space. Says Dabur India Executive Director (consumer care) VS Sitaram: We will leverage our herbal heritage for Vatika Almond oil since it is enriched with herbs. Then there are imminent new brands such as Mumbai-based VVFs newly acquired Mahabhringol oil which could be redone in a years time for launch. VVF also lays claim to backward linkages in oil-making, just like Marico in coconut oil. Aware of the mounting competition, Bajaj Corp has begun to expand Almond Drops in the South. The South being a stronghold for coconut oil, we had to offer something more wholesome, says Malhotra. While southern markets account for 28 per cent of the overall hair oil market, light hair oils only get one per cent of their revenue from there. Brand ambassadors would also help make it younger, according to Kumar of Technopak. The company has done well in the other regional market of the East, where Deys Medicals Keo Karpin, the second largest light hair oil, rules the roost. It has around 40 per cent of volume share and 43 per cent value share in this market.

Almond Drops unique selling proposition is its Vitamin E content that is claimed to be 300 times more nutritious than coconut oil. The ingredient open up possibilities for extensions in skin care such as creams and soaps, as it would for scalp and hair care products such as shampoos and creams, details of which will be let out after the IPO. To initiate further, Bajaj Corp is also pushing its smaller packs priced at Re 1 and Rs 5 in these regions. The smaller units give around 7 to 8 per cent of total sales, says Malhotra. Emerging from a one-brand company to a multi-brand one would require Bajaj Corp to juggle priorities. Would it scatter its focus? Kumar of Technopak says: It is better to diversify and leverage top-lines and economies of scale, rather than wait for margins to get hit with new player coming in. Malhotra agrees, Organic growth for our flagship hair oil brand, Almond Drops, is 30 per cent. But sooner or later, it will slow down to 13 per cent. For a boost, we have to look at inorganic means beyond the existing product, outside hair oils. Well said, but can he deliver?

Ladies and gentlemen good day and welcome to the Bajaj Corp Q1 FY'12 Earnings Conference Call hosted by Kotak Institutional Equities. As a reminder for the duration of this conference, all participants lines will be in the listen-only mode. There will be an opportunity for you to ask questions at the end of todays presentation. If you should need assistance during the conference, please signal an operator by pressing * followed by 0 on your touchtone phone. Please note that this conference is being recorded. At this time, I would like to hand the conference over to Ms. Amruta Basu of Kotak Institutional Equities. Thank you and over to you, Madam. Amruta Basu: On behalf of Kotak Institutional Equities I welcome all of you to this Bajaj Corp Q1 FY'12 earnings conference call. I would like to welcome the Bajaj Corp team, Mr. Sumit Malhotra, Managing Director, Mr. Dilip Maloo, CFO and Vice President Finance, Mr. Narayan Raman, President, Corporate and Investor Relations. I will now hand over the call to Mr. Sumit Malhotra to discuss the recently announced earnings. Thank you and over to you Sir. Sumit Malhotra: Welcome to the conference call for the Q1 FY'12 results. Thanks a lot for dialing in, as Amruta said I am Sumit Malhotra, the Managing Director of Bajaj Corp. I have with me Mr. Dilip Maloo, who is the CFO and Vice President Finance and Mr. Narayan Raman, who is the President of Corporate and Investor Relations of the Bajaj Group of Companies.

The company has closed the Q1 of FY'12 with sales of Rs.106.58 Crores and a profit after tax of Rs.28.42 Crores. This translates into a growth in turnover of 30.44% and a PAT growth of 25.16%. Our main branch, which is Bajaj Almond Drops, continues its growth story. Though the light hair oil markets have grown by 16.5% by volume and Almond Drops has shown a 20% plus volume growth. This has resulted in the value market share to 53.5% (this is MAT MS) value market share June 2011 and a volume market share of 49.5% this is a rise of approximately half a percentage point in both value and volume market share on a MAT basis in Q1. The brand is now available in over 20 Lakh outlets, which is a growth of around 80,000 outlets in the first three months of this financial year. If you translate this for the first six months, we have added more than 1.75 Lakh outlets to the franchise of Almond Drops. Our new brand, which is, as you know Kailash Parbat Thanda Tel has now been in the market for one and a half months and has already notched up the market share of 1% by volume. The brand is already available in 2.5 lakh outlets vis--vis the leader this would be around 27 Lakh outlets. Still very early days but the responses from the trade have been very encouraging especially considering the fact that we have not changed our policies towards the trade. We are still taking 100% advance payments as we do for Almond Drops. Our post launch consumer evaluation shows that the USP of Chandan has been liked by the consumers as has the differentiated perfume and the product color. With the summer season ending earlier this year, because of the earlier monsoons the summer has actually dampened much faster the next round of action in this brand will happen in March next year when the summer starts again. With the advent of monsoons and then winter the next two quarters see a much lower sales of cooling oils; however, we continue to build distribution by rolling out the Bajaj Corp Limited August 9, 2011 Page 3 of 18

brand to more towns and retail outlets so that we are well stocked before the arrival of next summer season. In states where Almond Drop is very strong, Kailash Parbat Cooling Oil has shown a much faster traction. To give you an example Rajasthan where we are strong in Almond Drops within the first month of launch it has notched up a 7.6% market share. I think this is a testimony to the strength of the Bajaj brand name and the distribution that we have been able to build up over the years. The second initiative if you all remember in the Q1 was the launch of 500 ml SKU of Almond Drops, as you would remember (as said in my earlier concall) that this was the first move away from a glass bottle in Almond Drop to a PET bottle. The response to this SKU has been very encouraging. In the first quarter of this year alone this SKU has contributed over 4.7% to the overall volume of the brand.What is even more encouraging is the fact that this is not at the expense of the other large sized SKU namely 300 and 200, incidentally 300 ml is the fastest growing SKU in the Q1 with a volume growth of 37%. The 3 ml sachets, which is spearheading our rural drive continues to grow at a very healthy rate of 35% by volume. We continue to add to our rural reach of our main brand. Our main brand that is Almond Drop is now available in more than a million outlets only in rural India as against a total of around 2.0 million outlets all over India. To give you a little heads up on the Hair Oil Industry, I am quoting Nielsen figures, the volume growth of hair oils have actually slowed down to 4.8% in the Q1 of this financial year. Though the value growth has been a healthy 21% the difference between the volume and value growth obviously is because of the increase in MRP of almost all brands. The Amla market has shown a 10.3% growth in volumes whereas because of the early end of our season, cooling oils have disappointed a little and shown a growth of just 7.2% in volume. As a result light hair oil continues to be the number one fastest growing segment within the hair oil market with a volume growth of 16.5% and value growth of 23.8%. The company continues its endeavor of high growth through inorganic route, towards this end we have recently appointed on the Board of Directors, Mr. Jimmy Anklesaria who as Director Business Development

will be in charge of shortlisting targets for acquisitions, engaging in the negotiations, finalizing the terms of acquisition and most importantly integrating acquired company into the Bajaj Corp Structure. EBITDA for the Q1 stands at 25% this has however declined if you compare it on year-on-year basis for the Q1. This is on account of steep increase in raw material and packaging material and also the higher advertising to sales ratio for the new product during this quarter. As you might be aware our main raw material is light liquid paraffin or LLP as it is called, the price of it is directly linked to the price of crude, as a result of the rise in crude prices during the period April to June 2011, the prices of LLP has averaged Rs.86.26 per kg, this is against an average of Rs.56.92 per kg during the Q1 of last year that is financial year 2011. Bajaj Corp Limited August 9, 2011 Page 4 of 18

This is a whopping 51% increase in prices of LLP on a year-on-year basis. In addition to this the prices of glass bottles have gone up by 17% and refined oil by 24%. We have taken a price increase of 8.5% on MRP basis on our main brand, which is Almond Drops in the April of 2011. The price increase has covered the rise in LLP prices up to Rs.90 per kg; however, we were able to get the benefit of this price increase only for two months during the quarter. In addition to this advertising and sales for promotion spends as a percentage to sales went up from 10% in Q1 of last year to 11.8% in the Q1 of this year this is mainly on account of the launch Kailash Parbat Thanda Tel as a result of all these factors, the EBITDA has fallen from a 35% level this was very high in Q1 of last year to a 25% in this quarter. With the full effect of price increase coming into effect and also softening of the crude oil prices we expect EBITDA to show much better margins in the coming quarter. I can now open it up for questions. Moderator: Thank you Sir. Ladies and gentlemen we will now begin the question and answer session. The first question is from Shweta Jain from Emkay Global. Please go ahead. Pritesh: Just confirming on the details, which you gave initially in the opening remarks you said that the overall volume growth for the hair oils was about 4%? Sumit Malhotra: 4.8%, total hair oil or branded hair oil, which is as per Nielsen figure. Pritesh: And we gave the figures of Amla 10% at volume growth, light oil at 16.5%, cooling oil was what I missed? Sumit Malhotra: 7%. Pritesh: If all the three have grown higher than this then which of the categories have actually grown lower than the 5% overall growth? Sumit Malhotra: More than half of hair oil is coconut, so the balance basically reflects in coconut hair oil market slowing down, as per our estimate it should be flat in Q1, I am taking only the Q1 figures into consideration. Pritesh: Secondly you said that the price increase, which you took, was about 4%? Sumit Malhotra: 8.5%.

Pritesh: And that was in the month of April? Sumit Malhotra: Yes. Pritesh: This covers the LLP price increase up to Rs.90 per kg? Sumit Malhotra: Yes, in Q1 the average was Rs.86 per kg.

Bajaj Almond Drops Oil Review

During my school and college times I tried every thing for my hairs.And love the comments from my friends.Those times it hardly matters for me what is good and whats bad for my hairs. But because of so many chemicals in the products which I used it turns my hair very weak. Then I really started to bother me whats good for my hairs. Someone does told me that there are many medicines available to control your hair loss,I tried searching it over the internet I came up with so many drawbacks and finally decided not to go for such risky things.

Somebody told me to change my Shampoo I tried many but none were found to be effective at those time.then my friend suggested me to change my h

View next photo air oil,I was feeling very risky as the shampoo does not prove to be effective.I contineued for some days but then I realised I need to give a change.I started a search for good oils but every products claims to be its best which 1 to go for???? As almond is found to be very effective for your entire body I started looking for product like this. I then decided to switch over BAJAJ ALMOND OIL, which contains the almond neutrants.I started using this product daily.there was hardly any diifferece for first 2 weeks but then the product shows its complete effect after a couple of weeks. After 6 months new hairs growth was been started.this product has really nourish my hairs. I really admire this product.