Why Bajaj Consumer Care is spending more on advertising in FY27

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TL;DR:

Bajaj Consumer Care raised standalone advertising and sales promotion spending 28.5% to ₹49.2 crore in Q1 FY27. The increase tracked faster sales growth while consolidated EBITDA doubled, suggesting the brand push was supported by operating leverage rather than margin sacrifice.

Article:

Bajaj Consumer Care raised standalone advertising and sales promotion spending 28.5% to ₹49.2 crore in Q1 FY27, alongside 28.8% growth in standalone net sales to ₹335 crore. Consolidated net sales rose 28.3% to ₹341.4 crore, EBITDA doubled to ₹84.4 crore and profit after tax climbed 84.8% to ₹70.7 crore. Comparative figures were restated for the scheme of arrangement with Vishal Personal Care.

The company kept consolidated advertising at 14.6% of sales, unchanged from a year earlier, while gross margin improved to 61.8% from 56.7%. The numbers suggest operating leverage, distribution gains and pricing funded the extra spend; media investment alone did not create the quarter. The 28.5% increase also exceeded the 10%-15% ad-budget growth several Indian FMCG companies had signalled for the June quarter.

Managing director Naveen Pandey told analysts, “Advertising is not an area where we are trying to squeeze down the cost.” He said the company plans to stay near its historical 15%-16% advertising-to-sales range over the medium term.

Almond Drops hair oil, about 80% of the portfolio according to management, delivered underlying volume growth in the low teens. Smaller price-point packs and sachets outpaced the brand average, while general trade, modern trade and e-commerce recorded broad-based gains. Management also attributed coconut portfolio growth to wider distribution, not free volume.

The strategy now faces a tougher test. Management expects gross-margin pressure in Q2 as higher-cost raw materials move through inventory, and cautioned that growth should moderate as favourable base effects fade.

The marketing lesson is disciplined rather than dramatic: Bajaj Consumer Care held advertising intensity steady while sales and profits rose faster. Sustaining that equation will depend on repeat demand, distribution productivity and market-share gains. A larger media budget can amplify momentum; it cannot manufacture it.