Hold Emami target of Rs 761 Prabhudas Lilladher

Prabhudas Lilladher's research report on Emami

HMN’s near-term outlook appears positive, supported by an uptick in rural markets, favorable seasonal conditions, and stable raw material prices. A strong winter season could drive 2H sales, benefiting from both the winter portfolio’s performance, a low base and anticipated uptick in rural demand. Emami is also experiencing a positive recovery in general trade across rural and urban areas, while modern trade and e-commerce channels are the fastestgrowing (26% share) led by quick commerce. We cut FY25/FY26/FY27 EPS estimates by 9.7%/11.0%/0.5% given 1) sustained pressure on Kesh King, Boroplus & Fair and Handsome 2) limited scope to increase margins and 3) higher spending to push for growth in troubled brands. While near term outlook seems positive, the stock has appreciated by ~60% in past 9 months and trades at 30.8xSep26 EPS.

Outlook

We estimate 13% PAT CAGR over FY25-27 and value the stock at 35x Sep’26 assigning a value of Rs761 (Rs.831 earlier). Retain Hold.