Home-grown FMCG company Emami Ltd has announced the restructuring of its board with the founders of the company — RS Agarwal and RS Goenka — relinquishing their executive positions on its board.
As a part of the restructuring, Mohan Goenka, Whole-Time Director of Emami, has been re-designated as Vice Chairman-cum-Whole-Time Director, and Harsha V Agarwal, previously Whole-Time Director, has been re-designated as Vice Chairman-cum-Managing Director effective April 1, 2022, subject to shareholders’ approval.
“Founders RS Agarwal and RS Goenka have expressed their desire to step down from their current executive positions while continuing on the board. Accordingly, the board unanimously decided to appoint RS Goenka as non-executive Chairman while re-designating RS Agarwal as Chairman Emeritus effective 1st April, 2022. Both Founders will not accept any emoluments from Emami Ltd for taking up their new positions. The decision comes in the wake of board restructuring that was a part of the succession planning of the FMCG business of the group,” the company said in a press statement.
Emami Ltd’s board also acceded to Sushil K Goenka’s desire to step down from his current position as the Managing Director of Emami Ltd as part of the transition process and has re-appointed him as a whole-time director of the company effective April 1,2022.
Commenting on the announcement, Founders RS Agarwal and RS Goenka said, “We are happy to announce the re-designation of Mohan Goenka and Harsha V Agarwal as Vice Chairman-cum-Whole-Time Director and Vice Chairman-cum-Managing Director of Emami Ltd, respectively. They have been at the forefront of running and growing the organisation for over two decades and their ascension today is a formal recognition of their contribution by our esteemed board.”
Buyback and interim dividend
The board of directors of Emami Ltd on Thursday approved a buyback of shares upto a value of 10 per cent of the company’s share capital and free reserves at a price not exceeding ₹550 per share.
Further, the board has also declared a second interim dividend of 400 per cent — i.e. ₹4 per share — for FY22.
“This is to inform you that the board of directors of Emami Ltd have approved the buyback of the company’s fully paid-up equity shares having a face value of ₹1 each, for an aggregate amount not exceeding ₹162 crore,” the company said in a notification to the stock exchanges on Thursday.
Q3 Results
Emami Ltd registered a four per cent rise in standalone net profit at ₹211 crore for the quarter ended December 31, 2021, as compared to ₹202 crore in the same period last year.
Standalone revenue grew around four per cent to ₹875 crore against ₹845 crore last year.
Consolidated net profit grew five per cent at ₹220 crore (from ₹209 crore).
The third quarter of this fiscal witnessed high inflation leading to a deceleration in consumer demand. Despite this consumption moderation, and notwithstanding a high base of 15 per cent growth in the corresponding quarter last year, consolidated revenue grew four per cent to ₹972 crore on a year-on-year basis and at nine per cent on a two-year CAGR basis, Emami Ltd said in a press statement.
Domestic business grew three per cent on a year-on-year basis over a base of 16 per cent growth in the previous year. Modern trade grew by 14 per cent and e-commerce continued its robust run, growing by 75 per cent over the previous year. In Q3 FY22, the salience of these new age channels increased to 14 per cent of domestic revenues.
International business grew by seven per cent on a year-on-year basis. Excluding sales in the immunity and hygiene range, international business grew 14 per cent led by key geographies like Bangladesh and Sri Lanka in SAARC, and other regions like Africa and Southeast Asia.
EBIDTA at ₹342 crore was flat over last year despite gross margins at 67.4 per cent contracting by 300 basis points due to inflation in key raw material prices, the statement said.