Emami - Growth Print To Improve; Comfort On Valuation: Motilal Oswal

Motilal Oswal Report

Emami Ltd.’s core categories are niche and they have been witnessing slow user addition over the last five years. Although it commands a high market share in core categories, the share gain is no longer a catalyst for volume growth.

The management has initiated several steps (e.g., team additions, new launches, hiring consultants, marketing spending, etc.) over the last three to four years to revive volume growth; however, the desired result has not been achieved yet.

However, we expect volume growth acceleration in FY25, driven by rural growth improvement and seasonal tailwinds.

Emami is currently trading at 34 times /31 times FY25E/ FY26E EPS. With likely reduction in the promoters’ pledge and consistent earnings growth going forward, we expect a re-rating in valuation. We retain our Buy rating on the stock with a revised price target of Rs 850, based on 35 times June-26E earnings per share (earlier 28 times price/earnings multiple).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.