Emami Ltd.

NSE: EMAMILTD | BSE: 531162 | ISIN: INE548C01032 |Industry: Personal Products
|Expensive Performer
233.50 -2.70 (-1.14%)
NSE Jul 16, 2020 15:31
Volume: 645.8K

Emami Ltd.    
30 Jun 2020
HDFC Securities
We value Emami at 17x on FY22E EPS and arrive at a TP of Rs 207. Maintain REDUCE. Emami's 4QFY20 performance was disappointing as the co registered a 17% yoy decline in consolidated revenues. Boroplus, Male Grooming and Kesh King saw sharp revenue decline of 77/42/26% yoy. 4Q performance was impacted by weak category growth (even prior to Covid-19) and lockdown. Emami continued to gain market share in most of its portfolio. Co could not react fast enough to cut costs, resulting in EBITDA contraction of 36% yoy with EBITDAM declining by 569bps yoy. Co is now focusing on strategic launches and relaunches in hygiene and healthcare to drive revenue growth. Benign commodity inflation and expected savings of Rs 500-600mn from cost saving initiatives in FY21 could see margins expand for the co. However, Emami's portfolio is discretionary in nature and we expect recovery will take slightly longer than other FMCG cos. Hence, we cut EPS estimate by 6% for FY21E/FY22E.
Number of FIIs/FPIs holding stock fell by 34 to 143 in Mar 2020 qtr.
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