Steady Performer

Emami came into our radar as it was setting itself up to join the big league. It had expanded its retail coverage to five lakh retail outlets and set up operations in over 60 countries. It has strong brands under its belt: Boroplus, Navratna Oil and Zandu Balm, among many others.

Revenue growth in Q2FY15 saw a jump of 20.4 per cent (YOY). Domestic revenues constituting 81.4 per cent of the total revenues grew by 18.4 per cent (YOY), with a volume growth of 11 per cent, helped in a large measure by the extended summer. International sales grew 32.8 per cent on the back of improved performance in the SAARC and Gulf countries. EBITDA margins jumped 165 basis points (YOY) on the back of lower raw material costs and lower other expenses.

Outlook
According to HDFC Securities, higher A&P to support new launches and staffing costs to support distribution and networking demands could result in the EBITDA margin contraction of 50 basis points in FY16. According to ICICI Securities, revenue growth is estimated at 18 per cent CAGR between FY14 and FY17. At 43 times earnings, the stock looks expensive. Hold.

Gain of 92 per cent at market price of ₹782. Recommended in February 2013 at ₹408.