Emami Q3 Results Review - Volume Muted; Rural Recovery A Key Monitorable: Motilal Oswal

"NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Emami Ltd. reported 1.4% YoY sales growth in Q3 FY24 (estimate +3.1%), hit by subdued rural demand and weak performance of the winter portfolio. The non-winter portfolio clocked 5% YoY revenue growth, while the winter portfolio (such as Boroplus) posted a 9% YoY contraction. The healthcare range was flat YoY (the immunity range contracted). Navratna and pain management ranges clocked 7% and 3% YoY growth, respectively. Emami’s volume dipped 1% YoY in Q3 FY24. Besides weak general demand, delayed winter also hurt growth. The four-year volume compound annual growth rate stood at 2%. Gross margin expanded 290 basis points YoY to 68.8% due to softening raw material prices. Ebitda margin rose 170 bp YoY to 31.6% (the best margin profile among fmcg peers). Ebitda growth stood at 7% YoY during the quarter.Emami’s core categories are niche and they have been witnessing slow user addition over the last five years. Although Emami commands a high market share in core categories, the share gain is no longer a catalyst for volume growth. Management has initiated several steps (e.g., team additions, new launches, hiring consultants, marketing spends, etc.) over the last three-four years to revive volume growth; however, the desired result has not yet been achieved. We factor in these issues in our target valuation multiple (at 40- 50% discount to peers). We value Emami at 28 times price/earning on Dec-25 earnings per share to arrive at our target price of Rs 600. Reiterate 'Buy'..Click on the attachment to read the full report:.Emami Q3 Results: Profit Rises 11% Despite Subdued Demand Trends.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

Emami Q3 Results Review - Volume Muted; Rural Recovery A Key Monitorable: Motilal Oswal

Management has initiated several steps over the last three-four years to revive volume growth; however, the desired result has not yet been achieved.

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Emami Q3 Results Review - Volume Muted; Rural Recovery A Key Monitorable: Motilal Oswal

Management has initiated several steps over the last three-four years to revive volume growth; however, the desired result has not yet been achieved.

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