Buy Emami; target of Rs 655: Sharekhan

Sharekhan is bullish on Emami has recommended buy rating on the stock with a target price of Rs 655 in its research report dated September 13, 2023.

Broker Research

September 14, 2023 / 15:51 IST

Buy

Sharekhan's research report on Emami

With AMRI sell-off getting the required approval, promoters’ pledge in Emami will be reduced to 15% by FY2024-end. The company’s is focusing on further reducing promoters’ pledge to low single-digit by H1FY2025 by selling other assets. Emami is likely to achieve high single-digit revenue growth in FY2024. However, if winter is strong, revenue growth might be 10-12%; EBIDTA margin is likely to expand by 200-250 bps y-o-y. The focus remains on achieving revenue growth of 12-14% with expanding reach in the rural market, scale-up in acquired and new ventures (including The Man Company) and strong double-digit growth in the international business. EBITDA margin will remain at 27-28%.

Outlook

We reiterate our Buy rating on Emami with a revised PT of Rs. 655. Discounted valuation of 27x/23x its FY2024E/FY2025E EPS, reducing promoters’ pledge, and improving growth prospects make it a good pick in the mid-cap FMCG space.

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