Emami Ltd. share price target

Emami is one of the leading and fastest-growing personal and healthcare companies in India. It boasts of an enviable portfolio of household brands such as Boroplus, Navratna, Fair and Handsome, Zandu and Mentho Plus Balm, Kesh King, Sona Chandi and Zandu Chyawanprash and Fast Relief.

Emami has reported below par numbers for the quarter ended March 2017 with consolidated sales of Rs5.8bn (down 4% YoY) and net profit of Rs833mn (up 1.5% YoY). Although domestic revenues grew by 3% YoY, revenues of international business division declined by 38% YoY during the quarter. We expect Emami to report consolidated revenue and earnings CAGR of 14.7% and 18.6% respectively through FY17-19E. Considering Emami's strong brands coupled with market leadership and pricing power, we maintain our BUY recommendation on the stock with Target Price of Rs1,244 (from Rs1,211 earlier). Stagnant Growth in Domestic Business...

Revenue grew by 24.26% to Rs. 725.17 Cr in Q3FY17 when compared to the previous quarter. Also, it rose by 0.19% when compared with Q3FY16.

Background: Emami is a FMCG company with niche focus on relatively under penetrated segments such as antiseptic cream, fairness cream, talcum powder, cooling oil, pain balm and pain reliever. Emami's power brands such as Navratna Oil, Boroplus Cream, Zandu & MenthoPlus Balm, Fair & Handsome, Boroplus Powder, Navratna Cool Talc, Fast Relief, SonaChandi & Zandu accounts for 75% of company's sales. Emami sales and PAT have grown at a CAGR of 18.4% and 23.2% respectively (FY08-13). Geographical breakup of sales: North (29%), West (27%), South (23%) and East (21%). Export contributes ~10.4% of total revenue. Company...

Background: Emami is a FMCG company with niche focus on relatively under penetrated segments such as antiseptic cream, fairness cream, talcum powder, cooling oil, pain balm and pain reliever. Emami's power brands such as Navratna Oil, Boroplus Cream, Zandu & MenthoPlus Balm, Fair & Handsome, Boroplus Powder, Navratna Cool Talc, Fast Relief, SonaChandi & Zandu accounts for 75% of company's sales. Emami sales and PAT have grown at a CAGR of 18.4% and 23.2% respectively (FY08-13). Geographical breakup of sales: North (29%), West (27%), South (23%) and East (21%). Export contributes ~10.4% of total revenue. Company...

Emami has posted 10.2% yoy growth in consolidated sales to Rs5.8bn in 2QFY17. While its EBITDA grew 15.3% yoy to Rs1.7bn, reported PAT rose by 9.2% yoy to Rs661mn. Volume grew by robust 10% yoy which is impressive considering current market scenario marked with weaker demand. Volume growth excluding Kesh King stood at 6% in 2Q. Expecting 17.5% revenue and 19.4% earnings CAGR through FY16-18E, we maintain our BUY recommendation on the stock with an upwardly...

Background: Emami is a FMCG company with niche focus on relatively under penetrated segments such as antiseptic cream, fairness cream, talcum powder, cooling oil, pain balm and pain reliever. Emami's power brands such as Navratna Oil, Boroplus Cream, Zandu & MenthoPlus Balm, Fair & Handsome, Boroplus Powder, Navratna Cool Talc, Fast Relief, SonaChandi & Zandu accounts for 75% of company's sales. Emami sales and PAT have grown at a CAGR of 18.4% and 23.2% respectively (FY08-13). Geographical breakup of sales: North (29%), West (27%), South (23%) and East (21%). Export contributes ~10.4% of total revenue. Company...

High interest costs and goodwill amortisation led to decline in reported PAT Key highlights: In Q1FY17, organic sales grew by 9.4% (6.4% volume growth). Strong growth was driven by BoroPlus/healthcare/cooling oils/cooling talc which grew by 38%/14%/8%/15% yoy. However, growth was lacklustre in Fair & Handsome/balms, which grew by 1%/6%. Domestic/international/CSD businesses grew 21%/14%/12%. Sales of Kesh...

Domestic sales grew 21% YoY in 1QFY17, with HMN gaining market share across its key categories. International business and CSD segment posted sales growth of 14% and 12% YoY, respectively. Gross margin stood at 64.5% (up 390bp YoY). Higher A&P; spends (up 70bp YoY to 23.8%) were partially offset by lower other expenses (down 120bp YoY to 8.6%). EBITDA margin expanded 450bp YoY to 22.9% (est. of +40bp YoY), mainly due to gross margin improvement. EBITDA thus grew 49.2% (est. of +22.8%) to INR1.5b. Adjusted PAT grew 18.4% (est. of +7.1%) to INR 1.2b....

Mixed Growth Trend but Margins Remain Robust Emami posted consolidated revenues of Rs6.4bn in 1QFY17, a yoy growth of 19.9%. While consolidated EBITDA grew 49.1% to Rs1.5bn, Consolidated cash profits for the quarter increased 17.5% to Rs1.3bn. Organic growth was recorded at 9.5% yoy with organic volume growing by 6.4% yoy. Reported numbers have been impacted on account of acquisition of Kesh King towards 1QFY16-end and resultant amortisation of the brand. Expecting Emami to report revenue and earnings CAGR of 17.5% & 20.9% through FY16-18E on the back of recovery in...