Emami's domestic volumes declined 16% YoY. Core domestic business (ex-talc/PHP) declined 12%. International business grew 8% in Q2 FY26. Consolidated gross margin was up by ~30 bps YoY to 71% (up by 160 bps QoQ vs our estimate of 69.5%).
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Nirmal Bang Report
Emami Ltd.'s results were weaker than expectations on volumes, Ebitda, and profit before tax level as the GST-led disruption delayed winter loading, and weak sales in talc/PHP due to rains caused an ~10% sales decline, consequently impacting margins as well because of operating deleverage.
Winter loading in Q3 FY26, restocking post GST, and likely good winter season could lead to high-single digit or double digit sales growth in Q3 FY26 as per the management; we are expecting 11% sales growth.
Nevertheless, we do not see any material outperformance over the next two years compared to the mid-single digit sales CAGR trajectory over the past 10 years.
We maintain our Hold rating on the stock.
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