The Board of Directors of Emami Limited met on January 30, 2017 to consider the unaudited financial results of the company for the third quarter and nine months ended December 31, 2016.
Turnover of the company at ₹ 726 cr. posted flat growth due to severe liquidity crunch in domestic markets and poor economic conditions in Middle Eastern countries. In 9MFY17, sales at ₹ 1,955 cr. grew by 9%.
Despite the liquidity crunch owing to demonetisation, the company’s domestic business delivered a topline growth of 3% during the quarter. In 9MY17, the domestic business grew by 12%. Further, new launches such as Fair & Handsome Face Wash, 7 Oils in One and HE Deodorants performed well.
Emami continued its focus on innovations with launch of BoroPlus Perfect Touch and Fair And Handsome 100% Oil Clear Instant Fairness Facewash during the quarter. The company also introduced Kesh King Ayurvedic Shampoo in a sachet at an attractive price point of ₹ 3/- to induce trials.
Emami’s power brands such as Navratna Cool Oil, Balms (Zandu and Mentho Plus) and Navratna Cool Talc further increased their market share to 62.0%, 56.3% and 27.1% respectively. Boroplus, Fair and Handsome Cream and Kesh King continued to maintain leadership with Volume Market Shares of 75.4%, 65.2% and 29.8% respectively.
Despite sustained investments in brands, the Company’s EBIDTA margins at 35.6% rose by 120 bps in Q3FY17 and by 180 bps in 9MFY17 at 29.7% mainly on account of gross margin expansion. EBIDTA at ₹ 259 crores grew by 4% in the third quarter and by 16% in 9MFY17 at ₹ 581 crore.
Cash Profits at ₹ 216 cr grew by 5% in Q3FY17 and by 10% in 9MFY17 with a Cash Profit of ₹ 489 cr. PAT at ₹ 134 cr posted flat growth in Q3FY17. However, PAT at ₹ 257 cr is lower by 9% in 9MFY17 on account of higher amortization of Kesh King intangibles by ₹ 62 cr vis-à-vis PY.
Globally, business environment continued to be volatile and challenging. While Bangladesh delivered good growth, worsening geopolitical situation in MENAP region and Africa impacted the sales in those regions adversely. Emami, however continued to gain market shares across major portfolio. While International Business excluding MENAP region grew by 10% and 14% in Q3 and 9M respectively, overall it degrew by 16% in Q3 and by 5% in 9MFY17.
Mohan Goenka, Director, Emami Limited, said, “Despite challenging domestic and international macro- economic factors, Emami has been able to perform satisfactorily. While liquidity crunch and sales channel disruption impacted the offtake of some of our brands in domestic market, challenging geo-political situation particularly in Middle East, Africa and other countries impacted the international performance to some extent. With the post demonetisation situation improving and the consumer sentiment getting back on track gradually, Emami is poised to capture this positive sentiment and target a good performance in the days to come.”
Harsha V Agarwal, Director, Emami Limited, said, “Muted performance in the third quarter is in line with our expectation because of the prevailing depressed market sentiments. However, despite lower offtakes, all our major brands have improved their market shares. Our winter brands such as BoroPlus and Vasocare have performed satisfactorily due to focused and targeted media campaigns and other brand initiatives. We continue to invest on our brands judiciously and expect to grow with the improving economic conditions.”
NEW MANUFACTURING UNIT:
The company is augmenting its manufacturing capacity by setting up a third manufacturing unit in North East under a mega project scheme at Guwahati, Assam. The total planned outlay for the project is ₹ 300 crore out of which the company has already invested ₹ 205 crore. The unit is expected to commence operations by FY17.
Emami Limited was ranked at 87th position (PY: 91) in Business Today’s “BT 500 India’s Most Valuable Companies” Ranking 2016.
Boroplus ranked 54th and Zandu ranked 100th featured among the Top 100 Brands in the Economic Times Brand Equity -Most Trusted Brands, 2016 across categories.
RS Agarwal, Founder and Chairman, was featured in the prestigious list of India’s Top 100 CEO’s by Business Today.