Buy Emami; target of Rs 575: Dolat Capital Market

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Dolat Capital Market's research report on Emami

Emami’s Q3FY21 results were ahead of our estimates. Domestic business jumped 16%, while IB posted 26% revenue growth in Q3. Barring Navratna range, all other products posted positive growth, demonstrating encouraging performance. Healthcare range maintained strong acceleration with 38% growth. Emami launched 30 new products during 9MFY21. NPD contributes 4% of domestic revenues. IB posted 26% growth driven by 8% increase in SAARC and 82% growth in MENAP. The company launched immune booster, sanitizers and hygiene products in IB. NPD contribution stood at 6% in IB in 9MFY21. We believe that competition in Emami’s key product categories such as skin, and hair oil, will continue to remain high.

Outlook

Nevertheless, we remain optimistic about the favorable base, and growth in health and hygiene market, especially in rural markets. Considering strong performance, we upgrade to BUY with TP of Rs 575 (30x FY23E CEPS).

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