FMCG major Emami Ltd will be “extremely aggressive” in terms of advertising and promotions (A&P) spending and new product launches for Fair & Handsome and Kesh King with the company’s brand team working on strategies to ensure that sales growth bounce back under these two brands.
While Fair and Handsome is a major brand within male grooming category, Kesh King is an ayurvedic hair care brand. The Kesh King range and the male grooming range declined 15 per cent and 5 per cent, respectively, in the first quarter this fiscal.
As part of its strategic plan for these two brands, which have not performed well, there will be more line extensions going forward, Emami said in an investors’ conference call.
“For Kesh King and Fair and Handsome, it will be line extensions of portfolios. The strategy we are working on. We are very unhappy about the numbers of Kesh King and Fair and Handsome. Our brand team is robustly working on the strategy for both the brands. This quarter (Q1FY25) was one-off for Kesh King, same thing for Fair and Handsome. You will see growth bouncing back. You will not see this kind of decline in both the categories,” Mohan Goenka, Vice Chairman and Whole-Time Director, said while replying to analysts’ queries.
The Kolkata-based FMCG maker acquired Kesh King in 2015. The brand is now around ₹300 crore portfolio. Indulekha and Patanjali are the main competitors for Emami in this ayurvedic hair care segment.
“A lot is happening in distribution, Kesh King strategy and Fair and Handsome strategy, brands which are not performing so well. The company is having increased focus on core portfolios. Advertising budget has increased significantly over the last two quarters. This quarter also, it increased by 21 per cent. And going forward we are going to be extremely aggressive, in terms of spend and launches,” said Manish Gupta, President – Sales Consumer Care.
Inorganic growth
The company said it has a “strong balance sheet” for looking at inorganic opportunities going forward.
“Inorganic is a part of our long-term strategy. For inorganic growth, the first choice is India. If we see some inorganic opportunities outside India with very specific markets, then we would look for outside India,” Goenka told analysts.
In the company’s latest annual report, released on Friday, Emami Ltd Vice Chairman and Managing Director Harsha V. Agarwal said to grow from one level to another with speed, there is a growing premium on acquisition. “What we cannot make or build, we would be better placed to acquire or invest,” Agarwal said on the inorganic growth strategy.
Emami’s major acquisition was in 2008, when it had acquired Mumbai-based Zandu Pharmaceutical for ₹750 crore in one of the most expensive takeovers in the Indian FMCG space at that time. Its latest big acquisition was Dermicool from Reckitt for a total consideration of ₹432 crore.
Around 45 per cent of the company’s topline is generated from acquired brands, according to its annual report for FY24.
“Emami will remain agile and a strategically driven entrepreneurial company where the size of addressable markets will be complemented by their under-penetration,” Agarwal added.