The June quarter witnessed challenges in terms of adverse economic conditions such as channel liquidity issues and muted rural incomes which coupled with a high base in Q1FY19 impacted growth levels in the domestic business. Despite such challenges, the company closed the quarter with Revenues of ₹ 649 cr which grew by 6% over previous year.
During the quarter, both Kesh King and 7 Oils continued to post robust growth, while Navratna grew satisfactorily. However, muted performance of Pain Management, Male Grooming, BoroPlus and Healthcare range led to lower growth in the domestic business. While, key brands like Navratna, Zandu & Mentho Plus balms, Kesh King and BoroPlus continued to gain market shares, Fair and Handsome maintained its leadership.
International Business grew by 34% during the quarter led by a strong performance in SAARC and MENAP regions. Excluding the new acquisition Creme 21, International Business grew by 10%.
During the quarter, Gross margins at 64.2% declined by 210 bps due to an increase in raw material costs. Despite this, EBIDTA grew by 11% and EBIDTA margins at 20.7% grew by 110 bps. PAT at ₹ 39 cr grew by 47% and PAT margins increased by 170 bps.
Mr Mohan Goenka, Director, Emami Limited said, “We are happy to report a healthy profit-led growth this quarter with revenues growing by 6% and PAT growing by 47%. Despite continuing input cost pressure, our EBIDTA margins expanded by 110 bps. However, the macroeconomic environment continues to be challenging, with a distinct slowdown in the consumer demand curve particularly for discretionary products. Despite such challenges, we are satisfied with the performance of Kesh King, Navratna, 7 Oils in One and international business this quarter. With the stabilization of raw material prices and the government impetus to put rural growth on the fast track, we expect business to bounce back in the coming quarters”
Mr Harsha V Agarwal, Director, Emami Limited said, “Our power brands reinforced leadership in the respective categories increasing their market shares during the quarter which we believe is credible given a hesitant consumer sentiment. In the international front, our new acquisition of the German personal care brand Creme 21 received encouraging consumer traction. Our outlook for the balance quarters in FY 20 remains positive based on the business strategy adopted to build a strong foundation for sustainable profitable growth, efficient management of risks /challenges and improvement of operating margins.”