Bajaj Consumer Care Ltd

Dear Shareholders,

The Bajaj Consumer Care annual report you hold in your hands, our 16th, has been prepared in the months that do not resemble the ones from the year past. Not in the slightest. Compared to April-May-June of 2021 when the second wave of Covid-19 was ravaging lives by the millions across India, right now is a breeze. We can breathe. Normally. Go out. Meet other people. Risk shaking hands. And maybe, just maybe, give someone close, a hug.

Now that we have gained some distance from those grim months of the last year, we also have the advantage of posterity. We can see with greater clarity and scan the events of FY 21-22 with a critical eye not available to us earlier. But before I delve into how the business fared or the scenarios that played out and impacted our performance across product categories, I believe a huge debt of gratitude is owed to all those who helped us make it through. The medical fraternity, the civic services, vaccine manufacturers, the government and everyone who played a part in helping us extricate ourselves from our dreaded situation and return to a semblance of normalcy, deserves our sincerest thanks. I tread lightly when using the word "normalcy" since it applies differently and needs contextualising nowadays. So while we may have begun reclaiming "normalcy" and "the familiar" for ourselves, one can't say the same for the markets we cater to. For the pandemic upturned it in such profound ways that we had to re-orient ourselves on nearly all fronts – right from the way we position ourselves and our products to how we reach the customer.

The impact of Covid on the personal care segment of the market and the sub-categories in which we play viz., hair, skincare, and hygiene underwent massive changes – some of which continue to develop still. For instance, in the wake of the pandemic, consumers began showing a clear preference for "natural" products across both hair oils and skin creams. With health and physical well-being becoming key determinants of choices in a post-Covid world, consumers gravitated towards products which were organic and made from natural or even herbal ingredients. The concern for better bodily care and psychological health among users also made the market move in a direction where products offered essential benefits, beyond the perfunctory.

The hair oil category recovered in FY 2021-22, growing by 4.2% in value terms and 2.2% in volume terms. The industry is now very close to the pre-pandemic performance of FY 19-20. Household penetration levels of hair oils also continued to hold, with household penetration levels holding steady at 93-94% over the last 3 years.

we launched two digital brands: Natyv Soul and Bajaj 100% Pure. We are heavily investing in digital marketing initiatives, and expect to reap its rewards, in years to come.

During FY 21-22 we clocked sales of Rs 865.5 Crores, against

Rs 898 crores in FY 20-21 registering an overall decline of_3.6%.

These subpar numbers notwithstanding, we remain firmly convinced of our play in the market and overall positioning. Given how the sector tracked in the later quarters of FY 21-22 and the course correction we did in order to improve our performance – tactically and strategically – we are confident of brighter days ahead.

One of the key remedial actions we took during FY 21-22 was bolstering our product portfolio to cover categories which showed an uptick in the immediate aftermath of the pandemic. When coconut hair oil, for instance, began seeing a surge in demand – driven in part by closure of stores and retail outlets and consumer anxieties around future availability – we decided to move in and introduced two new products viz. Bajaj Coconut Hair Oil and Bajaj Coco Onion Hair Oil in quick succession. We doubled down on our portfolio expansion efforts further by investing in Amla Hair Oil category with products including Bajaj Amla Aloe Vera Hair Oil and Bajaj Sarson Amla Hair Oil.

Similarly upon noticing that consumers were beginning to add hair oils and skincare, and hygiene products to their online shopping carts, we took a decidedly digital turn with the launch of two new ‘digital only' brands viz., Bajaj 100% Pure and Natyv Soul.

In a world in which being available online may seem par for the course, I believe this move to be epoch-making for us. By redefining our product-mix thusly, not only were we able to tap into a fast emerging category but also announce to the market our new and aggressive intent.

These developments while rapid weren't by any means knee-jerk reactions to external events. Far from it, our actions followed carefully studied plans and long-term strategies with clearly defined objectives. We went online only after finding a fit for ourselves and assessing if we had an appetite for digital waters. We have directed significant resources towards building a digital muscle and are currently sharpening our sales and marketing focus to grow the channel.

Beyond anticipating consumer behaviours and adjusting to market realities, launching new products, and chasing newer avenues of growth, at BCCL we also lay a strong emphasis on sustainability in our operations. Guided by a legacy of nearly hundred years of trust, ESG – the newly minted acronym for Environment, Social, and Corporate Governance – has been part of our organisational grammar much before it entered the corporate lexicon.

From a culture that cares for employees and stakeholders part of our value chain right up to customers and community, our sustainability efforts have a high-degree of people orientation. Coupled with it are processes that are inherently consistent, transparent, and accountable. As with any responsible corporate today, we have made concerted efforts to lessen our ecological footprint and be as less extractive as possible by putting in place mechanisms to cut-down wastages, water, and energy consumption.

Besides, our outreach efforts which are channelled through the Bajaj Foundation, constantly attempt to set the bar in terms of social upliftment of those living on the fringes of the_society.

As with businesses world over, Bajaj Consumer Care too had to take in its stride the challenges thrown by the twelve "eventful" months of the last financial year. And trying as the circumstances might have been, WE PERSEVERED. We take heart from our experiences and promise to thrive in FY 22-23 and beyond.

I take this opportunity to thank all our stakeholders for their unwavering support. Together we stand better prepared, stronger, and more determined than ever to grow and deliver value for all.