Emami Ltd - Q2 FY21 Result Update - YES Securities

Emami Ltd (Q2 FY21) - (CMP Rs367, MCap Rs164bn)

Result Highlights - Revenue/EBITDA/PAT growth of 11%/33%/23% led by sharp margin improvement; 13% domestic growth (10% volume growth) and 11% international growth (led by Bangladesh) with 60bps GM improvement and 570bps EBITDA margin improvement (120bps cut in adspends and 330bps cut in SGA spends); health & hygiene portfolio up 44% and winter portfolio down 39%; 20 new product and 40 SKU launches in 1H contributed 4% to revenue; growth led by healthcare (+53%), pain management (+31%) and Kesh King(+45%), Boro Plus was weak (-25%); launched own e-commerce portal for Zandu; growth across channels including MT.

Valuation and view - The stock is currently trading at 28x/26x FY22/FY23 for 26-27% ROEs which looks quite reasonable in light of the near-term momentum on both the demand and margin fronts. Company seems to be benefitting from its strong rural and wholesale reach which can be leveraged further through its current focus on healthcare and other relevant categories. With demand momentum expected to stay for the next few quarters, cost controls and benign RM helping margins move up further and promoter pledge issues behind, the stock should start a re-rating cycle after a long consolidation.

YES Securities - Emami Ltd (Q2 FY21) - 20201109

Shares of EMAMI LTD. was last trading in BSE at Rs.377.9 as compared to the previous close of Rs. 370.65. The total number of shares traded during the day was 21937 in over 958 trades.

The stock hit an intraday high of Rs. 380 and intraday low of 367. The net turnover during the day was Rs. 8244957.

Source : Equity Bulls

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