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Last Updated : Jul 01, 2020 10:41 AM IST | Source: Moneycontrol.com

Hold Emami; target of Rs 240: Emkay Global Financial

Emkay Global Financial recommended hold rating on Emami with a target price of Rs 240 in its research report dated June 29, 2020.

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Emkay Global Financial's report on Emami


Emami’s Q4FY20 revenue and EBITDA came in 5% and 31% below estimates at Rs5.3bn and Rs1bn, respectively. The domestic business remained weak as most core brands recorded a steep decline. Sales declined 17%, owing to a 19%/4% fall in the domestic/international business. Excluding 7 Oils in One, which grew 5%, the performance across brands was weak, with Boroplus/Male Grooming/Navratna/Healthcare/Kesh King declining 77%/42%/12%/9%/26%. Input prices remain soft, which should continue to drive the gross margin expansion. Management hopes to maintain profitability as higher GM and cost savings (~Rs500mn in FY21) may offset the decline in sales.



Outlook


Management indicated a healthy pace of recovery in June. However, given lacklustre growth over the last four years, we await overall growth visibility to improve. We maintain Hold with a TP of Rs240.





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First Published on Jul 1, 2020 10:41 am
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