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 (~38% mix now vs. 52% earlier) to modern trade (9-10% mix now vs. 4% earlier) and direct reach (0.95mn stores vs. 0.63mn earlier). Besides, stake sale in Emami cement, will reduce the promoter pledge in Emami to ~25% vs. 72%. It will ease the pressure on promoters and will result in renewed strategy to revive domestic business. We remain bullish on Emami, given favorable risk-reward and potential rebound in domestic business. Emamis 3Q was muted across the board, with flashes of outperformance. Domestic business was impacted by delayed winter and persistent weakness in male grooming. However, 60% of domestic business (ex-winter portfolio and male grooming) posted 13/10% val/vol growth. Emami Group also sealed the sale of its stake in the Cement biz in Feb-20, which will significantly reduce promoter pledge. As a result, increased focus by the promoters on the domestic biz can fill the required gaps in domestic business in FY21. We value Emami at 30x on Dec-21E EPS, arriving at a TP of Rs 445. Maintain BUY.