Prabhudas Lilladher's research report on Emami
Emami 1Q results were a beat on revenues but miss on margins due to input cost inflation and adverse sales mix. Flat volumes ex-Dermicool were on expected lines as Pain Management & Health Care range saw 59%/70% growth in base quarter due to severe 2nd COVID wave. Margins will remain under pressure in 1H23 with easing expected only in 2H. Near term outlook remains intact due to lower base in 2Q22, peaked out commodity prices and favorable monsoon which should help revive rural demand in 2HFY23. Medium term growth outlook remains positive with 1) management guidance of double digit revenue growth in IBD 2) improved reach in MT/e-com/quick com platforms in both D2C and e-B2B segments 3) increase in direct town coverage to 50k (from 41.5k) by FY23 4) increasing ad-spend to gain market share. HMN plans to build on digital first brands like Navratna therapy, Kesh King onion range and Crème 21 products, although it will not have any significant impact in near term.
We estimate 11% PAT CAGR over FY22-24 and value the stock at 29x Mar24 EPS (unchanged) and assign a value of Rs611/share (unchanged). Retain Accumulate.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.