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Emami Q1 profit jumps 47% to Rs 39 cr as margin improves

Emami said during the quarter, both Kesh King and 7 Oils continued to post robust growth, while Navratna grew satisfactorily

August 08, 2019 / 12:32 PM IST
 
 
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FMCG firm Emami's June quarter consolidated net profit shot up 48 percent year-on-year to Rs 39.1 crore as margin improved on lower advertising expenses. It was partly supported by other income.

Profit in the corresponding period last year was at Rs 26.5 crore.

Consolidated revenue from operations during the quarter increased 5.6 percent to Rs 648.6 crore compared to year-ago despite adverse economic conditions.

"The June quarter witnessed challenges in terms of adverse economic conditions such as channel liquidity issues and muted rural incomes which coupled with a high base in Q1FY19 impacted growth levels in the domestic business," Emami said in its BSE filing.

The Company further said international business grew 34 percent during the quarter led by a strong performance in SAARC and MENAP regions. Excluding the new acquisition Creme 21, International business grew 10 percent, it added.

Earnings before interest, tax, depreciation and amortisation rose 11.4 percent year-on-year to Rs 134.1 crore and margin expanded 110bps in the quarter ended June 2019 despite fall in gross margin, as advertising and promotion expenses fell 9.5 percent YoY.

Gross margins at 64.2 percent declined 210 bps due to an increase in raw material costs YoY in Q1.

"Despite continuing input cost pressure, EBIDTA margin expanded 110 bps. However, the macroeconomic environment continues to be challenging, with a distinct slowdown in the consumer demand curve particularly for discretionary products," Mohan Goenka, Director said.

He further said with the stabilisation of raw material prices and the government impetus to put rural growth on the fast track, the company expects business to bounce back in the coming quarters.

Emami said during the quarter, both Kesh King and 7 Oils continued to post robust growth, while Navratna grew satisfactorily. However, muted performance of Pain Management, Male Grooming, BoroPlus and Healthcare range led to lower growth in the domestic business, it added.

Other income more than doubled to Rs 11.49 crore in Q1, against Rs 5.04 crore in the same period last year.

The stock reacted positively to earnings, showing a 3.7 percent intraday rise. It was quoting at Rs 315.50, up Rs 7.65, or 2.48 percent on the BSE at 1208 hours IST.

Moneycontrol News
first published: Aug 8, 2019 12:32 pm

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