Emami's underperformance over the last 3 years has not been caused by competitive intensity rather its own challenges like (1) High wholesale dependence, (2) Core brands' dependence on seasonality, (3) Limited portfolio for premiumisation and (4) Pledge related disturbance. The company has made some progress in the last 2 years in diversifying its distribution from wholesale (~35% mix now vs. 52% earlier) to modern trade (9% mix now vs. 4% earlier) and direct reach (0.95mn stores vs. 0.63mn earlier). Benefits are coming at a gradual pace. Recovery in macros (rural) coupled with a favorable season can lead to a rebound in Emami's performance. We remain believers, given favorable risk-reward and high probability for a consumer business to rebound. Emamis 1Q performance was mixed with in-line revenues but beat on EBITDA margins. Co is yet to find a way to revive its domestic business. Core categories are struggling for growth and market share gains are becoming meaningless to track. Growth is coming in bits & pieces and has failed to revive overall domestic performance. Cost control (10% cut in A&P;) expanded the EBITDA margin in 1Q. We are hopeful for acceleration in domestic revenues in 2HFY20 (driven by improving macros and favorable base) but cut EPS by ~4% for FY19-21E. We also cut our target P/E to 30x (32x earlier) on Jun-21 EPS to factor weak management execution. Our TP is Rs 464 (Rs 500 earlier). Maintain faith, reiterate BUY.