Emami’s 4QFY23 revenue grew by 9% YoY (on Dermicool and Helios consolidation). Domestic/international revenues grew by 5/19% YoY, with organic domestic revenue declining by c.8%. While male grooming/ Kesh King grew 29/1%, there was sustained pressure on all other brands as Boroplus/Navratana/Healthcare/Pain Management declined by 25/3/13/9%. GM improved on softening input costs (+60bps YoY) while EBITDAM expanded by 260bps to 23.9%, aided by lower A&P spends (-395bps YoY). Emami remains cautiously optimistic about demand recovery, given (1) softening inflation to aid rural demand; (2) increased brand investments; and (3) a favourable base. However, the summer season remains the key monitorable.
OutlookWe remain cautious about core business growth, given the limited scope to add new consumers in niche categories. We maintain our estimates and value the stock at 20x P/E on Mar-25E EPS to derive a TP of INR 385. Maintain REDUCE.
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