FMCG major Emami expects over 10 per cent year-on-year sales growth for this fiscal led by an improvement in demand environment for both urban and rural markets, strong summer season and potentially a good monsoon.
“Our outlook for the coming quarters is positive, with a strong summer season and forecast of a good monsoon. We will continue to be focussed on our objective of achieving a sustainable and profit-led volume-driven growth and amplifying our new growth engines,” said Mohan Goenka, Vice-Chairman and Whole-Time Director, Emami Ltd, during the Q4FY24 investors’ conference call.
“Looking ahead, we anticipate an improvement in consumption, both in the urban and rural markets, sustained by optimistic prospects for the rabi crop and a forecast of normal monsoons,” Goenka said.
He said the rural markets are witnessing a recovery, which bodes well for the company’s future prospects. “Internally, we are seeing some signs of recovery from all corners...Hopefully, this will continue both in urban and rural areas,” Goenka said.
Q4 results
Emami on Wednesday reported a 3.62 per cent y-o-y rise in its consolidated net profit to ₹146.75 crore for Q4FY24. Revenue from operations for the quarter grew 6.61 per cent y-o-y to ₹891.24 crore. Its domestic business grew by 8 per cent, while volume growth was 6.4 per cent y-o-y during the fourth quarter.
On growth aspirations for FY25, Goenka, during the conference call, said the company expects more than 10 per cent sales growth for the current financial year. The FMCG maker also expects an EBITDA margin improvement for this fiscal.
On Thursday, Emami’s scrip ended the day at ₹611.80 apiece on BSE, up by a whopping 17.28 per cent. With brokerages increasing their target prices, the company’s stock hit a fresh 52-week high during the day.
“Emami has felt the brunt of weak rural demand and seasonality for the last couple of years. We see the outlook improving, given improving seasonality and rural rebound. Discretionary consumption pick-up is still worrisome, as the segment portfolio has Kesh King and male grooming which have seen muted growth,” Emkay Research said in its report.