Emami: Q2FY23 Result Update
15-11-2022

Market Cap: Rs. 19,569 cr

CMP Rs. 444 | PE 24x TTM

Results	INR Cr.	Y-o-Y Growth	Comments
Revenue	814	3.4%	Domestic revenue grew 1.2% (with a volume de-growth of 1.2%) and international business grew 17%
Gross Profit	542	0%	Gross margin came in at 66.7% (-230bps YoY) due to inflationary pressure as well as favourable portfolio mix last year (higher sales of pain management range)
EBITDA	195	-29.5%	EBITDA margin came in at 24% (-1121bps YoY) due to new subsidiary costs, marketing investments and distribution expansion

Key Highlights:

BoroPlus range grew by 10% YoY; male grooming range grew by 2%; Navratna and Kesh King range declined by 5% and 10%, respectively. Pain management and healthcare range witnessed correction of 13% and 16%, respectively.
Newer channels like modern trade grew by 28% (8.7% of total revenue) and e-commerce grew by 56% (7.8% of total revenue). Both these channels account for 16.5% of revenue (up from 11.3% in Q2FY22).
Company continued to invest aggressively in advertising, with spends increasing by 400bps in this quarter.

Management Outlook:

BoroPlus range is expected to grow in double digits this year.
Management sees input cost pressure easing substantially, resulting in no margin pressure in Q3FY23.
EBITDA margin guidance for the core business (i.e. ex-Helios) given as ~27% for FY23.
The company is committed to invest in its brands and distribution channels. Thus ad spends are expected to be ~16.5% of revenue.
Management aims to reach 50,000 villages by end of FY23, up from 32,000 2 years back.
Effective Tax Rate to be ~10% in FY23 and FY24 due to utilisation of MAT credit.