The growth prospects make Emami a good tactical pick as the valuation is among the cheapest in the sector
Rural recovery and a good winter will drive earnings performance
Packaged consumer goods maker Emami Limited, the manufacturer of products such as BoroPlus, Zandu balm, Navratna and Kesh King, announced a management rejig last week as founders of the company handed over the reins to the next generation. Mohan Goenka and Harsha V. Agarwal, scions of the 48-year-old business, will lead the company from April as its vice chairman-cum-whole time director and vice chairman-cum-managing director, respectively.
Helped by investment behind brands and higher distribution reach, Emami has strong names like Zandu and Boroplus to ride on
Volume-led recovery and lower raw material cost are aiding Emami's margins
The company also said it wishes to transform Boroplus, which is largely a winter skincare product, to an all-year brand with a new range of soap and hand wash, thus reducing the company's dependence on seasonality.
FMCG major Emami has posted a strong set of numbers in its fourth quarter with net profit rising 24.45 percent. In an interview to CNBC-TV18, NH Bhansali CEO - Finance, Strategy & Business Development and CFO of Emami Group, discusses the results and company‘s future outlook.
The management is hopeful of sustaining volume growth trend of 11 percent in the second half of FY15. NH Bhansali, CEO of Emami Group says that better scale will ensure margin expansion in the future.
Emami had posted net sales of Rs 406.74 crore for the second quarter ended September 30, 2013 while its net profit stood at Rs 79.95 crore for the quarter.
In case the winter sets in properly then the company expects products like Boroplus, Chyawanprash, lotions to do well and aid growth in coming quarters, says NH Bhansali of Emami Group.
Emami's net sales in the quarter under review were at Rs 406.74 crore, an increase of 12.77 percent compared with Rs 360.66 crore in the corresponding quarter in the previous year.
The Kolkata-based Emami Group is busy launching variants and reorganising its Ayurveda portfolio under the Zandu brand, besides concentrating on Fair and Handsome
NH Bhansali, CEO, Emami Group explains to CNBC-TV18 that the company plans to sustain growth at 17 percent on high rural consumption and increased capacities from manufacturing facilities in Bangladesh and Egypt.
Driving on the robust growth of its various brands including Boroplus and Zandu Chyawanprash, FMCG firm Emami is aiming for over 20 per cent growth in sales during the winter season.