In Short:
FMCG company Emami expects a sales growth of over 10% this fiscal due to strong demand in urban and rural markets, a good summer season, and expected good monsoon. The company’s Q4FY24 results showed a 3.62% rise in net profit and a 6.61% increase in revenue. Emami aims for more than 10% sales growth in FY25 and anticipates an improvement in consumption, especially in rural markets.
The Human Side of Emami’s Positive Sales Growth Outlook
Imagine this – a world where your favorite FMCG products are not just meeting demand but exceeding it! Well, that’s exactly what Emami is expecting for this fiscal year.
A Positive Forecast
The FMCG major Emami is anticipating over 10% year-on-year sales growth for this fiscal year. And what’s driving this growth? A promising improvement in the demand environment for both urban and rural markets, a strong summer season, and the potential for a good monsoon.
According to Mohan Goenka, Vice-Chairman and Whole-Time Director of Emami Ltd, the outlook for the coming quarters is indeed positive. With a strong summer season underway and a forecast of a good monsoon, the company is set to focus on sustainable and profit-led volume-driven growth, as well as amplifying their new growth engines.
The Rising Expectations
The rural markets are showing signs of recovery, which bodes well for Emami’s future prospects. Goenka mentioned during the Q4FY24 investors’ conference call that they are seeing signs of recovery from all corners internally, and are hopeful that this trend will continue in both urban and rural areas.
Q4 Results
Emami recently reported a 3.62% year-on-year rise in its consolidated net profit to ₹146.75 crore for the fourth quarter of FY24. With revenue from operations growing by 6.61% year-on-year to ₹891.24 crore, the company also saw a domestic business growth of 8% and a volume growth of 6.4% year-on-year during the same quarter.
Looking Ahead
As for the coming financial year, Emami anticipates more than a 10% sales growth, along with an expected improvement in EBITDA margin for the fiscal. The positive outlook has already reflected in the company’s stock performance, with the scrip ending the day at ₹611.80 apiece on BSE, up by a remarkable 17.28%.
With brokerages increasing their target prices, Emami’s stock reached a fresh 52-week high, reflecting the market’s confidence in the company’s growth potential.
Analyst Insights
Analysts at Emkay Research noted that Emami has faced challenges due to weak rural demand and seasonality in the past few years. However, the outlook is now looking up, with improvements in seasonality and a rebound in the rural market. While there are still concerns regarding discretionary consumption growth, the company’s portfolio including Kesh King and male grooming has experienced muted growth.
