Prabhudas Lilladher's research report on Emami
We revise our EPS estimates for FY23/24/25 by 4.9/-1.4/0.7% which factors in impact of easing raw material inflation, expected pickup in demand and increased adspends. 3Q results saw volume decline by 3% owing to sluggish demand in rural India along with late onset of winters. Key categories like Pain management, Kesh King, Boroplus, Navratna and Male grooming remain under pressure. However, with input cost pressures now receding and green shoots visible in rural demand, Emami is positioned for a healthy recovery. Emami is investing for the future by 1) new launches in existing categories like Boroplus, Zandu and new product launches in healthcare segment 2) investment in new B2C new age businesses and modern trade 3) increase in direct town coverage to 50k (from 40k) by FY24 and 4) increasing ad-spend to gain market share.
Outlook
We estimate 10.4% PAT CAGR over FY23-25 we value the stock at 26x Dec24 EPS and assign a value of Rs516/share (Rs 521 earlier). Retain Accumulate.
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