Motilal Oswal's research report on Emami
Domestic revenue rose 14% YoY, with 10% volume growth. The quarter continued to see CSD and wholesale channel destocking, but there has been significant recovery compared to 1QFY18. HMN expects the wholesale channel to return to normalcy in 2HFY18. CSD (3% salience) declined by 20% YoY.
Outlook
At 36.4x FY19E EPS, the stock is relatively inexpensive, particularly given healthy long-term earnings growth and mid-30s return ratios. We maintain our BUY rating, with a revised target price of INR 1,435 (40x September 2019E EPS, in line with 3-year average).
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