Hold Emami; target of Rs 831: Prabhudas Lilladher

Prabhudas Lilladher's research report on Emami

We Cut FY26 EPS estimates by 2.9% due to tax guidance of 10-11% and higher amortization. Emami has shown 8.7% volume growth backed by strong growth from summer portfolio even as Kesh King, male grooming (ex Man Company) and Pain management reported decline in sales. New age business (The Man Company and Brillare) have achieved 23% sales growth while Man Company has achieved EBIDTA breakeven. Emami is also promoting Digital First launches on Zanducare, which will boost healthcare portfolio and improve sales mix. Near term outlook seems positive on expected revival in rural demand, favorable seasonality and benign raw material prices. Emami is witnessing positive recovery in GT in both rural and Urban India while MT/ Ecom have sustained strong growth. While the outlook seems positive, the stock has appreciated by ~90% in past 3 months and trades at 37.7xJune26 EPS.

Outlook

We estimate 14% PAT CAGR over FY24-26 and value the stock at 38x Jun’26 assigning a value of Rs831 (Under Review earlier). We assign Hold rating on the stock.