A good improvement in gross margin and market share has helped Emami Group to deliver strong earnings in the fourth quarter of FY16, said NH Bhansali, CEO- Finance Strategy and Business Development, and CFO of Emami Group. The healthcare and personal care segments have done reasonably well in Q4 for the company.Summer brands -- Navratna Oil, Navratna Cool, Navratna Extra Thanda -- along with the healthcare business, and the newly launched Zandu Honey contributed 27 percent to EBITDA margins, he added. Bhansali expects 15-16 percent organic revenue growth in FY17. The international business may grow up by 20-25 percent, and the company can see an uptick in the growth from Q2 onward, said Bhansali. The current advertising expenses for Emami is around 18 percent, and it will continue to invest at the same levels, he added. Below is the verbatim transcript of NH Bhansali’s interview with Reema Tendulkar & Sonia Shenoy on CNBC-TV18. Sonia: Good margin performance 27.2 percent EBITDA margins what led to that this quarter and if you could break it up for us brand wise which brand has done well? A: This quarter was dominated by summer and summer brands has performed really well. In fact Navratan Oil, Navrtana Extra Thanda, Navratna Cool Talc and also the Health Care Division (HCD) business where the Pancharishta and other brands kind of Vigorex. Even we launched last in this quarter Zandu Pure Honey that is also doing very well. So, all these brands in healthcare even in a personal care also has done reasonably well in this quarter and we have been able to meet our expectations. Reema: Also if you could come in on the topline. You have guided for a 15 to 16 percent organic revenue growth in FY17 with a double digit volume growth. What could be the growth on consolidated basis, if you could also help us with that number and will growth be blackened how will it be split within the quarters? A: These guidelines are for the consolidated revenue growth only and we expect the growth to come from all as I said from all the brands taken together and also from the Kesh King which was for the part of the year in the last year and this year will be the first full year of operation. International business is also expected to grow above 20-25 percent in this year. We expect a good all round growth from domestic business and also from the international business. If you look at quarterly, which quarter, it is very difficult to say but we expect an uptake even in the second to third quarter of this fiscal itself and good growth would come in. Sonia: Can you tell us little bit more about what your advertising expenses will be going ahead because you do have some new brand ambassador’s Hrithik Roshan, you signed up Sania Mirza last year. All of this doesn’t come cheap so because of your new product launches what kind of higher ad expenses would you be incurring? A: We are spending in the region of around 17-18 percent or so. We would continue to invest into the brand. As you rightly said that there new launches further and so with the thrust on the new launches these expenses would remain at this higher level of advertisement to sales ratio of around 18 percent or so. Sonia: 18 percent is that correct? A: Ya. Reema: Will you continue to employ the strategy of growth through acquisitions or inorganic avenues in the coming year also? A: We are always on the lookout for any good opportunity in India and also across the globe. We have done it at an appropriate time whenever we felt that there is any good opportunity, which has the strong synergy with our existing business and we will continue to do so. Sonia: A lot of your other peers have also performed well this quarter. I just wanted to understand how the trough is right now? Do you think a double digit volume growth is something that we could see in the quarters to come because of an improvement in demand and where are you seeing the green shoots? Is it more to do with rural demand or is urban demand picking up? A: For our kind of products we are seeing growth from both rural and urban and our fleet is around 50 percent growth is coming from rural urban both.
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