Buy Emami; target of Rs 850: Motilal Oswal

Motilal Oswal's research report on Emami

Emami reported 3% YoY sales growth in 2QFY25 (est. 5%). The domestic business grew 2.6% YoY, led by volume growth of 1.7% (est. 3%). This quarter faced headwinds as persistently high food inflation continued to suppress mass consumer spending. Seasonal product pipeline filling was also pushed back to 3Q, which partially impacted 2Q performance. Navratna and Dermicool products posted healthy 10% YoY growth. The healthcare segment reported 11% YoY growth, led by new launches and strong traction on the digital platform. Pain management and BoroPlus reported 5%/2% YoY growth. Kesh King and male grooming dipped 9% and 13% YoY, respectively. D2C portfolio declined 9% due to the management change (increased Helios stake to 98.3% from 50.4%).

Outlook

Emami is currently trading at 35x and 32x on FY25E and FY26E EPS. We reiterate our BUY rating with a TP of INR850, based on 35x Sep’26E EPS.