The Board of Emami Ltd, on Friday, approved the proposal of Buyback of fully paid-up equity shares having a face value of Rs 1 at a price not exceeding Rs 450 per equity share which is a 26 percent premium to the current price levels.
The aggregate amount of the buyback is capped at Rs 186 crores and the mode is set to be via an ‘Open Market’ route through the stock exchange mechanism. The Record date with regard to the same is yet to be announced.
The company’s stock opened its trading hour today at Rs 365 and is currently trading at Rs 356. The scrip is down approximately 1.8 percent in comparison to the previous closing price of Rs 362.55. Over a timeframe of six months, the stock has underperformed and lost around 30 percent ranging from Rs 500 to the current levels.
Emami Ltd is an Indian personal care and healthcare business in India with well-known brands such as Fair and Handsome, BoroPlus, Navratna, Fast Relief, etc. The company has international operations in over 60 countries spread across Europe, Africa, Gulf Cooperation Council countries, and the South Asian Association for Regional Cooperation countries. Its key business lines are fast-moving consumer goods (FMCG), newsprint, retail, pharmacy, etc with majority of the firm’s revenue coming from India.
Having a quick glance at the financial parameters of the company, revenues and net profits have witnessed a decent amount of growth on QoQ basis. Revenues shifted from Rs 813.75 crores in Q2 to Rs 982.72 crores in Q3. Moreover, the net profit figures showed a movement from Rs 182.29 crores in Q2 to Rs 233.59 crores in Q3.
Adding to the above growth, the profitability ratios have also been on a rise since the past three financial years. ROE figures have moved from 25.59 percent in FY20-21 to 44.34 percent in FY21-22. Apart from the same, the ROCE figures have also shown movement from 30.16 percent in FY20-21 to 33.74 percent in FY21-22.
One thing to be concerned about is the increasing debt to equity ratio of the company moving from 0.05 during FY20-21 to 0.13 in FY21-22.
Written by Amit Madnani
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