On Tuesday, Emami’s stock price exhibited a strong opening with substantial trading volume, propelled by robust demand. The company’s shares soared by more than 9% today, buoyed by its impressive Q1 financial results that outperformed market expectations. Commencing at ₹463.75 per share on the Bombay Stock Exchange (BSE), Emami’s share price displayed a noteworthy surge.
In its Q1FY24 report published on Monday, Emami disclosed a remarkable 86.5% year-on-year increase in its consolidated net profit, amounting to ₹137.72 crore, attributable to equityholders of the parent company. This marked a decline of 4.6% in consolidated net profit compared to ₹144.43 crore in the preceding quarter (Q4FY23). Concurrently, the company’s consolidated revenue from operations ascended by 6.8% year-on-year, reaching ₹825.66 crores during the quarter ending in June, as opposed to ₹773.31 crore in Q1FY23.
The company’s exchange filing revealed an elevation of gross margins for the quarter, expanding by 240 basis points to 65.4%, attributed to a reduction in the pressure stemming from escalating raw material costs.
Harsha V Agarwal, Vice Chairman and Managing Director of Emami, expressed satisfaction with a 7% growth in the domestic business despite a challenging operating environment. While adverse weather conditions impacted summer product sales, the non-summer portfolio witnessed a robust 16% growth. The international business segment maintained its growth trajectory with an 11% constant currency increase. With a moderating inflation outlook, the company looks ahead with increased optimism and confidence. Agarwal emphasized the role of the digital ecosystem, stating that both e-commerce and direct-to-consumer (D2C) channels will play a pivotal role in the company’s growth strategy, prompting further investment to bolster an omni-channel presence for enhanced consumer outreach.
Equity Technical and Derivative Analyst at Angel One observed a gap up opening in Emami’s stock price today, accompanied by persistent strong buying momentum and increased trading volume. The analyst anticipates this upward movement to persist, potentially testing the previous high around the 520 level, while noting 470 as an immediate support level. A “buy on dip” approach is advised for traders.
Nuvama Institutional Equities announced an increase in its FY24E/FY25E earnings per share (EPS) estimates by 2% and 1.4% respectively. As a result, the brokerage set a revised Emami share price target of ₹550, up from the previous target of ₹520, while maintaining a ‘Buy’ recommendation.
Motilal Oswal Financial Services underscored the attractive valuation of Emami’s shares, trading at 20 times FY25 EPS, and reaffirmed its ‘Buy’ rating. The brokerage established a target share price of ₹560 for Emami.