Its third quarter witnesses subdued demand trends, particularly in rural markets
Given the recent reports, the board of directors of Emami met to consider the unaudited financial results for the third quarter and nine months ended 31st January 2024.
Emami's third quarter witnessed subdued demand trends, particularly in rural markets. Moreover, the period was characterised by the late onset of winter, negatively impacting the demand for winter contextual products. Despite these challenges, Emami navigated the dynamic business environment, demonstrating resilience and achieving profit-led growth during Q3FY24.
Emami’s consolidated revenues at Rs. 996 crores grew by 1 per cent in Q3 with a flat growth in domestic business. However, non-winter products grew by 5 per cent. The international business delivered a constant currency growth of 11 per cent, primarily attributed to robust performance in the MENAP region.
In light of reduced input costs, the company experienced a noteworthy enhancement in gross margins, reaching 68.8 per cent, reflecting a substantial expansion of 290 basis points during the quarter. Furthermore, EBIDTA at ₹315 crore grew by 7 per cent, with margins expanding by 170 basis points to 31.6 per cent. Profit after tax at ₹260 crore, also grew by 9 per cent with margins expanding by 180 basis points to 25.9 per cent.
For the nine months ending December 2023, Emami witnessed a 5 per cent increase in revenues, coupled with an expansion of gross margins by 290 basis points. EBIDTA surged by 11 per cent, with margins expanding to 27.5 per cent, indicating a rise of 170 basis points. Notably, the profit after tax demonstrated an impressive surge of 16 per cent, amounting to ₹575 crore. The board of directors also recommended a second interim dividend of 400 per cent, translating to ₹4/- per share for the fiscal year 2024.
Emami remains optimistic about future growth, supported by a favourable economic landscape, a positive trend in inflation, anticipated rural market recovery, government initiatives, and promising macroeconomic factors, all contributing to a confident outlook for sustained positive performance.
Harsha V Agarwal, vice chairman and managing director, Emami said, “I am happy that we could deliver another quarter of resilient performance along with substantially improved profitability with a 7 per cent growth in EBIDTA and 9 per cent growth in profit after tax, despite subdued demand in Q3. Disrupted winter, weak rural demand and continued inflationary woes impacted the winter and discretionary offtakes. We remain committed to delivering volume-led profitable growth going forward aided by accelerated scale-up of emerging channels, distribution initiatives, ongoing brand and strategic investments coupled with the launch of innovative products”
Mohan Goenka, vice chairman and whole-time director, Emami added, "We showcased our adaptability in the face of changing market dynamics to post a resilient revenue growth despite a delayed winter. Our international business posted an impressive 11 per cent constant currency growth led by MENAP region. Our commitment to innovation remains unwavering, marked by the launch of various new innovative products both in domestic and international markets, underscoring our dedication to driving future growth and delivering value to our stakeholders.”
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