{"id":1926,"date":"2021-05-26T10:43:50","date_gmt":"2021-05-26T10:43:50","guid":{"rendered":"http:\/\/www.assetmultiplier.co.in\/blog\/?p=1926"},"modified":"2021-06-01T05:03:33","modified_gmt":"2021-06-01T05:03:33","slug":"confident-of-double-digit-growth-in-fy22-on-pent-up-demand-emami","status":"publish","type":"post","link":"https:\/\/www.assetmultiplier.co.in\/blog\/2021\/05\/26\/confident-of-double-digit-growth-in-fy22-on-pent-up-demand-emami\/","title":{"rendered":"Confident of double-digit growth in FY22 on pent-up demand \u2013 Emami"},"content":{"rendered":"

Update on the Indian Equity Market:<\/strong><\/p>\n

Domestic markets started cautiously positive and witnessed a strong rebound as it gained momentum from expectations of another set of relief measures. The new stimulus package is expected to focus on boosting the worst-hit sectors like tourism, aviation and hospitality along with MSMEs. Nifty ended above 15,300 as value buying was seen in the IT sector while Metals stocks remained in the correction phase due to muted international commodity prices.
\nAmong the sectoral indices, REALTY (+2.8%), MEDIA (+1.9%), and IT (+1.8%) were top gainers while METAL (-1.9%), and PSU BANK(-0.3%) were among the top losers. Among the stocks, BAJAJFINSV (+4.6%), BAJFINANCE (+2.7%), and INFY (+2.5%) were the top gainers. POWERGRID (-3.0%), HINDALCO (-2.5%), and JSWSTEEL (-2.4%) were the top losers.<\/p>\n

Edited excerpts of an interview with Mr. Mohan Goenka, Director, Emami with CNBC TV18 dated 26th May, 2021:<\/span><\/p>\n

\u2022 Emami reported good Q4 earnings on a favourable base with 39% volume growth in domestic business. Director, Mohan Goenka says he’s confident of double-digit growth in FY22 on pent-up demand. He added their promoter pledge is at 30% & they will reduce it to 15% in the next 1 year.
\n\u2022 Revenue was over Rs 9000 mn in 3QFY21 v\/s ~Rs 7300 mn in 4QFY21. But these numbers are not comparable on QoQ basis due seasonality in business. Emami has shown a decent growth in 2 years horizon and when compared to 4QFY19 the growth is robust.
\n\u2022 All categories like Zandu Balm, Kesh King, Men\u2019s grooming products and Menthoplus has grown much better in 4QFY21 over 3QFY21.
\n\u2022 40-45% of the sales comes from the winter portfolio.
\n\u2022 Emami started with a good note and first two weeks of April saw a very good demand. Emami has seasonal products and has healthy summer products like Navratna Tel and cool talc, however the demand tapered this season. But it is also seen that the demand really bounces back as soon as cases comes down and this time when market opens up, the company is confident of delivering a double-digit volume growth as the pent-up demand comes through.
\n\u2022 Seeing the input price inflation, Emami has taken 4% price hike which will take care of the input cost pressure leading to a stable Gross Margin.
\n\u2022 Rural demand has been impacted across geographies in second wave. The Company expects demand to pick up quickly as soon as lockdowns are lifted.
\n\u2022 Having the healthcare range in the portfolio, Emami was able to sell products even in the month of April and May. The demand for these products was seen to be robust.
\n\u2022 In the last 2 years contribution of E-commerce has reached ~4% of domestic business from 0.5%. It is expected to reach at least 6% in next 2-3 years.
\n\u2022 Cost reduction was seen in employee cost, other expenses and advertisement, EBITDA margin was at all time high at 30% level and target is to sustain margins going ahead.
\n\u2022 No need to add capacity as of now as the capacity utilization is ~60%.<\/p>\n

Asset Multiplier Comments<\/strong>
\n\u2022 We believe that competition in Emami\u2019s key product categories such as skin, and hair oil, will continue to remain high. Nevertheless, we remain optimistic about the favourable base, and robust demand and growth in health and hygiene market, especially in rural markets.<\/p>\n

Consensus Estimate (Source: investing. com and market screener websites)<\/strong>
\n\u2022<\/strong> The closing price of Emami was \u20b9 504\/- as of 26-May-20. It traded at 42.5x\/32.1x the consensus EPS estimate of \u20b9 11.8\/15.6 for FY22E\/ FY23E respectively.
\n\u2022 The consensus target price of \u20b9 564\/- implies a PE multiple of 36x on FY23E EPS of \u20b9 15.6\/-.<\/p>\n

Disclaimer: \u201cThe views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Update on the Indian Equity Market: Domestic markets started cautiously positive and witnessed a strong rebound as it gained momentum from expectations of another set of relief measures. The new stimulus package is expected to focus on boosting the worst-hit sectors like tourism, aviation and hospitality along with MSMEs. Nifty ended above 15,300 as value […]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[507,80],"tags":[210,156,470],"_links":{"self":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1926"}],"collection":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/comments?post=1926"}],"version-history":[{"count":3,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1926\/revisions"}],"predecessor-version":[{"id":1936,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1926\/revisions\/1936"}],"wp:attachment":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/media?parent=1926"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/categories?post=1926"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/tags?post=1926"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}