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Dolat Capital Report
Emami Ltd.'s revenues came in line with our estimate but Ebitda and adjusted profit after tax were ahead of our expectation.
Domestic business grew 4% with 2% volume growth while international business reported 12% YoY growth. On constant currency international business reported 16% increase.
Modern trade grew by ~17% while e-commerce jumped 50% YoY in Q2 FY24.
Emami is continuously improving its share in the new trade channels and is expected to accelerate sales (modern trade/e-com contribution at 11/13%).
Though Emami's Q2 performance exceed our estimate, we have maintained our FY24/25E earnings per share estimate at Rs 18.1/19.1 considering high seasonality in the business.
Going ahead, we believe that recent investments would mitigate negative impact of rural slowdown.
We have introduced FY26E EPS at Rs 20.7. Valuing the stock at 27 times FY26E EPS, arrive at a target price of Rs 560. Maintain 'Reduce'.
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