Buy Emami Limited; target of Rs 1392: Bonanza

Bonanza's research report on Emami Limited

Recently, the stock price of Emami Ltd. (Emami) corrected by ~19% from 52-week high of Rs.1,365 on account of the company reported lower than expected revenue in the recent quarters as the volume growth was adversely affected post demonetization. Emami’s revenue had grown at a CAGR of ~11.7% during FY12-17 largely aided by distribution expansion and its recent acquisitions.

Outlook

With market leader position in some products, revival in rural demand, niche focus on the ayurvedic products, highest marketing spend and plans to increase the direct retail reach, we value Emami at 70.00x FY19E EPS of Rs.19.90 to arrive at target price of Rs.1,392.00, an upside of ~22%. For all recommendations report, click here

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