Emami sees 17-18% revenue growth in FY13

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Emami sees 17-18% revenue growth in FY13

FMCG company Emami sees a sales growth of 17-18% in 2012-13 (April-March), helped by continued growth in urban demand and rapid expansion in rural areas.

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FMCG company Emami sees a sales growth of 17-18% in 2012-13 (April-March), helped by continued growth in urban demand and rapid expansion in rural areas.

"At least 17-18% (organic) growth should be maintainable in top-line and commensurate in bottom-line," Naresh Bhansali, CEO - finance, strategy, & business development said in a post earnings conference call on Monday.

Emami, like other FMCG firms, has expanded its reach in the rural areas, given the strong growth potential there. Helped by government employment schemes and good monsoon rains, rural growth has outpaced that in urban areas.

Currently rural sales account for 50% for Emami's turnover, and Bhansali said that could go up to 60% in future.

The Kolkata-based company had reported a net profit of Rs 94.49 crore in the third quarter, up 10.5% year-on-year. Its net sales in the October-December quarter rose 13.2% from a year ago to Rs 457.26 crore.

Emami's gross margins rose around 200 basis points in the quarter, helped by price hikes taken during the quarter. 

A 10% year-on-year growth in volumes, 69 bps rise in EBITDA despite severe inflation in menthol, a key raw material, were among the key positives from Emami's third quarter results, brokerage Edelweiss Securities said. However, flat growth in its balm portfolio and decline in revenue from international operations, due to weak performance in Africa, were key negatives, it said.

Slowdown witnessed in Africa led to 7-8% decline in Emami's exports, although other regions saw good growth. Middle East revenue, for instance, rose 50% from a year ago in Oct-Dec, Edelweiss noted.

Meanwhile, Emami expects its plant in Bangladesh will be operational by the end of January-March or in the beginning of the April-June quarter. The company is targeting a turnover of Rs 40 crore from Bangladesh in the next fiscal year from around Rs 25 crore now.

Emami has also invested Rs 8 crore in Egypt. But Bhansali said further decision on investments there would depend on the political situation in the African country.

Emami shares were trading up 0.5% at Rs 383.10 on NSE in afternoon trade on Monday. Edelweiss has a "buy" rating on the stock.

Nachiket Kelkar
nachiket.kelkar@network18online.com