Buy Emami: target of Rs 570: Sharekhan
Sharekhan is bullish on Emami has recommended buy rating on the stock with a target price of Rs 570 in its research report dated May 25, 2021.
June 10, 2021 / 11:15 AM IST
Sharekhan's research report on Emami
Emami posted yet another quarter of strong performance, largely led by 39% volume growth in the domestic business (overall volume growth of 33%). However, the company witnessed a miss on margins, with OPM at 22.3% (versus expectation of 25%-27%), affected by dip in gross margins. Healthcare range grew by 45% in FY2021; Management is confident of growing it by 20%-22% in FY2022 due to likely improvment in penetration and strong traction to new launches. Increased contribution from new product launches, distribution expansion, and improved sales on channels such as e-commerce and modern trade will support overall growth in the near term.
Strong liquidity position (Rs. 350+ crore cash), improved dividend payout of 78%, and discounted valuation of ~24x to close peers make it a good pick. We maintain Buy with an unchanged PT of Rs. 570.
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