The shares of Emami Ltd, a homegrown FMCG company, saw its share price decline by more than 2 percent in Wednesday’s session and reach a 52-week low of Rs 390 in the early hours. In the past month, the stock has declined by approximately 10 percent.
The stock started declining after the company reported flat growth in its quarterly revenue from operations stood at Rs 982.72 Crore in Q3FY23 compared to Rs 971.85 Crore in the same quarter the previous year. From the previous quarter, their revenue jumped 21 percent from Rs 813.75 Crore.
Their profit after tax grew sideways to Rs 233.59 Crore as compared to Rs 222.81 Crore in Q3FY22. Compared to the previous quarter, it increased by 28 percent from Rs 182.29 Crore.
During the quarter, demand patterns for the FMCG sector remained sluggish, with rural markets experiencing continued demand pressure. Further, a warmer winter season across the country impacted sales even more, the company said.
Emami is engaged in the manufacturing & marketing of personal care & healthcare products with a product portfolio that includes brand names such as BoroPlus, Navratna, Fair and Handsome, Zandu Balm, Kesh King, Zandu Pancharishta, Mentho Plus Balm and others.
Brokerage firm Prabhudas Lilladher has an ‘Accumulate’ rating on the stock with a target price of Rs 521 per share representing an upside of 34% from the current levels.
“Though Emami delivered top-line growth of 1.2% vs our de-growth expectations of 4.5%, GM/EBITDA margins miss our estimates by 144bps/106bps. However, PAT was in-line with our estimates due to the elimination of amortization for the Kesh King acquisition. GM contracted on account of adverse RM basket while EBITDA margins contracted due to rise in employee and other expenses,” the brokerage said.
Written by Anoushka Roy
