Kolkata-based FMCG company Emami Ltd registered nearly 21 per cent drop in standalone net profit at ₹144 crore for the quarter ended September 30 against ₹182 crore in the same period last year.
Revenue from operations on a standalone basis witnessed a four per cent drop at ₹685 crore ( ₹712 crore). On a consolidated basis, however, revenue from operations increased by three per cent to ₹814 crore (₹787 crore).
Muted demand
PBT declined by 18 per cent to ₹186 crore due to high inflation in input costs and low base in Covid period, inclusion of new subsidiary costs, upfront marketing investments and strategic outlays on distribution expansion in rural, digital and modern trade channels, the company said in a press statement.
The domestic FMCG industry continued to remain soft during the quarter and demand sentiment remained muted due to continued inflation, rural slowdown and liquidity pressure.
Excluding pain management and healthcare range — which saw corrections in this quarter as a result of decline in consumption of Covid contextual products — and the new subsidiary Helios Lifestyle, net sales grew by 8 per cent during the quarter, it said.
Both modern trade and e-commerce continued to perform exceedingly well, to post a growth of 28 per cent and 55 per cent, respectively. In Q2FY23, the contribution of modern trade and e-commerce channel increased to close to 17 per cent of domestic revenues.
International business continued to grow strongly by 17 per cent on the back of good performance across most markets. MENA and CIS performed well in the international markets.
In Q2FY23, gross margins contracted by 230 basis points due to inflationary pressures combined with unfavourable portfolio mix due to extraordinary high sales of pain management products last year.
“We are happy that despite challenging business and industry environment, the first half delivered net sales growth of 10 per cent. With our strong focus on cost control, distribution expansion, aggressive marketing campaigns and driving penetration, we expect to deliver double digit growth with healthy margins in the second half. Thus, on a full year basis, we aspire to deliver double digit growth with higher EBIDTA than previous year for our core business,” Harsha V Agarwal, Vice Chairman and Managing Director, Emami Ltd said in the statement.
The company’s board declared an interim dividend at 400 per cent i.e. ₹4 per equity share.
Emami scrip closed at Rs 464.35, down by 0.17 per cent on the BSE on Friday.