Emami Ltd, the homegrown FMCG major, posted a strong performance in Q3 FY25, with a 7.03% year-on-year (YoY) increase in net profit at ₹278.98 crore, compared to ₹260.65 crore in the corresponding quarter last year. This growth was driven by healthy volume growth in its core business, showcasing the company’s resilience amidst a dynamic macroeconomic environment.
Revenue from operations rose by 5.33% to ₹1,049.48 crore, compared to ₹996.32 crore in the same quarter last year. Total income, including other revenue, increased by 5.07% to ₹1,064.41 crore during the reporting quarter. The company attributed this growth to its focus on profit-led strategies and improved operational efficiencies.
Margins and Profitability
Emami reported an 8% YoY increase in EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization), which stood at ₹339 crore for the quarter. EBITDA margins expanded by 70 basis points to 32.3%, underscoring the company’s strong focus on operational excellence. Gross margins improved further, expanding by 150 basis points to 70.3%, reflecting the company’s robust financial management.
The company highlighted several headwinds during the quarter, including urban demand challenges influenced by rising food inflation and liquidity constraints in retail and wholesale trade channels. However, rural demand showcased resilience, buoyed by favorable monsoon conditions and a robust harvest, providing a silver lining amidst market uncertainties. Seasonal categories, however, faced challenges due to the delayed onset of winter.
Performance of Key Brands
Despite challenges, Emami’s core domestic business grew by 9%, with a healthy volume growth of 6%. Key brands, including its healthcare range and BoroPlus, delivered strong performances. Navratna and the pain management portfolio showcased resilience, achieving growth in the low single digits. The strategic rebranding of Fair and Handsome to Smart and Handsome, coupled with initiatives for skin and hair care brands, is expected to offer significant growth potential in the future.
Total expenses for the quarter rose to ₹710.79 crore, reflecting a 4.3% increase YoY. The company continued its focus on maintaining profitability amidst rising costs.
Second Interim Dividend
In addition to its strong financial performance, Emami’s board of directors declared a second interim dividend of ₹4 per share for FY25, equivalent to a 400% payout. This follows a similar ₹4 per share dividend declared in Q2 FY25, taking the cumulative dividend payout for the fiscal year to an impressive ₹8 per share or 800%.
Stock Performance
As of 9:43 AM, shares of Emami Ltd were trading 2.01% higher at ₹545.80 on the NSE, within a day range of ₹542.75 to ₹562.15. The stock has a year range of ₹417.10 to ₹860. With a market capitalization of ₹23,746 crore, Emami’s stock has maintained its appeal among investors. The company’s P/E ratio stands at 30.79, and it offers a dividend yield of 1.47%.
Management Commentary
Commenting on the results, Vice Chairman and Whole-Time Director Mohan Goenka expressed optimism about FY25, describing it as a promising year for the company. “EBITDA increased by 8% during the quarter, with margins expanding by 70 basis points, underscoring our strong focus on operational excellence. The strategic rebranding of Fair and Handsome to Smart and Handsome offers significant growth potential,” he said.
Despite macroeconomic challenges, including urban demand pressures and delayed winter, Emami’s focus on profitability, brand innovation, and rural market strength have positioned the company for sustainable growth.
