Sell Emami; target of Rs 850:Axis securities

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26 Aug, 2025 12:21

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Axis securities's research report on EmamiIn-line results: Consolidated net sales and EBITDA grew 14% and 18%,inline with consensus est. of 14% and 20%. Organic sales growth (excluding Kesh King) was disappointing at 4.0% YoY.Volume growth excluding Kesh King was flat. GPM expanded 350 bps to 70.8% (highest ever). OPM expanded 110 bps to 31.6% (highest ever) despite A&P remaining high at 19% (+176 bps). Adj. PAT was flat due to higher interest cost (due to Kesh King debt) but reported PAT declined 27% due to amortization of Kesh King’s intangible assets. Slowing growth in power brands and failure of some of the new launches is a cause for concern. We estimate 12.4% EPS CAGR over FY15-18 with 240bps EBITDA margin increase. Margin could be at risk if there is a spike in commodity prices. At FY17 P/E of 39x, it is expensive vis-a-vis domestic FMCG peers. Maintain SELL.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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