AHMEDABAD (Commodity Online): Bajaj Corp Ltd, India’s leading hair oil manufacturer sees above-average growth rate for the current fiscal, primarily on the back of improved raw material cost scenario. The prices of light liquid paraffin oil, one of the key ingredients of hair oils and a derivative of crude oil may remain under desired limits as international crude prices continued hovering at $78 per barrel for a sustained period now.

Bajaj Corp, a top player in fragmented hair oil segment expects to continue its last year’s growth rate both in volume and value terms. The company had registered revenue growth of 42%, while its volumes rose by 33% for the FY 2010 over the previous year.

Commenting on the growth and the future direction of the company, RF Hinger, Vice-Chairman, Bajaj Corp Ltd maintained that the company would reduce its dependence on the popular brand Almond Drops – a product developed by mixing sweet almond drops and vitamin E supplements besides other raw materials, and increase the focus on attracting more coconut oil customers.

“We will reduce our dependence on the Almond Drops product and increase our product segments. We are also considering product extension by broadening our purview from only hair oils to overall personal care segment,” Hinger told reporters here at a press conference for the company’s IPO launch.

Presently, company is focused on light hair oil segment, which holds only 13% of the market share in the overall hair oil segment, against coconut oils that holds about 60% of the total hair oil market. Light hair oils made by Bajaj use a combination of raw materials like light liquid paraffin oil, edible oils like refined mustard oil or groundnut oil and perfumes.

A top company official told CommodityOnline that the fluctuations in the international crude prices do affect company’s costing. On one hand that hampers cost-structure of the company, while on the other it also benefits the company with increased margins. “Due to peaking up crude prices last year, we had to shift that hike to the retail customers. But now crude prices are off the peak levels but the markets absorbed our price hike, hence our margins increased significantly,” the official said.

Besides the product portfolio expansion, the company also looks to expand its overseas presence with larger revenues expected from export operations. Currently only around 2% of the revenues are coming from the exports.

The company is planning to raise capital via public listing of the company on bourses. The company will hit the capital markets on August 2 through Initial Public Offer (IPO). The price band for the IPO has been set between Rs.630 to Rs.660 per share of the face value of Rs.5 each.

Company intends to utilize the IPO proceed for the promotion of future products in the personal care segment and strategic acquisitions.

Post your comment  (0)

Connect:

Post to Twitter

Post to Facebook