Buy Emami: target of Rs 550: Sharekhan

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26 Aug, 2025 12:21

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Emami has acquired Dermicool, a leading brand in prickly heat and cool talc category, from Reckitt Benckiser (India) Ltd. for a consideration of Rs. 432 crore (~4x price/sales). Low penetration of prickly heat and cool talc category at 11-12%, combined market share of 45%; strong distribution synergies and growth opportunities in adjacent categories makes it a good acquisition from medium to long-term perspective. Slowdown in domestic market and raw material inflation remain key headwinds in the near term. We have reduced our earnings estimates for FY2023/24 by 10% and 7% respectively due to the near-term headwinds.

Emami’s stock price has corrected by ~13% in the past one month (26% in last six months) and trading at discounted valuations of 24.7x/20.3x its FY2023E/24E earnings. We maintain our Buy recommendation with revised PT of Rs. 550.

At 14:07 hrs Emami was quoting at Rs 444.45, up Rs 12.70, or 2.94 percent.

It has touched an intraday high of Rs 448.60 and an intraday low of Rs 434.45.

It was trading with volumes of 32,685 shares, compared to its thirty day average of 31,869 shares, an increase of 2.56 percent.

In the previous trading session, the share closed down 2.47 percent or Rs 10.95 at Rs 431.75.

The share touched its 52-week high Rs 621.35 and 52-week low Rs 430.00 on 24 August, 2021 and 29 March, 2022, respectively.

Currently, it is trading 28.47 percent below its 52-week high and 3.36 percent above its 52-week low.

Market capitalisation stands at Rs 19,756.41 crore.

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