Sharekhan's research report on Emami
Emami’s revenues grew by 17.8% driven by 13% growth in the domestic business and a 45% growth in the international business. Organic revenue grew by ~10% (ex-Dermicool). Gross margins and OPM decreased by 341 bps each due to unfavourable mix and higher input cost. Domestic volumes grew by 8% on a high base of 38% volume growth in Q1FY2022. Excluding the recently-acquired Dermicool brand (8% contribution to revenues) and healthcare products and pain management volumes grew strongly by 24%. Management is eyeing double-digit growth in the medium term through improved growth in hair oil and skincare category, new recruitments through bridge packs in key categories and expansion in distribution network (especially in rural markets). Better monsoons could lead to revival in rural demand. The stock is currently trading at 24.7x/20.1x its FY2023/FY2024E earnings.
We maintain Buy with an unchanged PT of Rs. 550.
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