Emami Q1 Results Review - Favorable Seasonality Aids Growth: ICICI Securities

ICICI Securities Report

Emami Ltd.’s Q1 FY25 revenue grew 10% YoY led by 9% volume growth, as extended summer season led to strong performance in summer portfolio (27% YoY) and digital-first brands (+23% YoY).

Positively, management highlighted signs of rural recovery (already) in its portfolio which should help drive double-digit revenue growth in FY25. International business reported decent performance with 10% YoY revenue growth (+11% YoY constant currency growth).

Gross and operating margins remain healthy with significant increase in ad-spends (+21% YoY) which is likely to continue with aggressive new product launches in FY25.

We believe Emami has already taken several initiatives (distribution expansion, product launches, brand investments and improved performance in new-age channels) to drive growth, and signs of rural recovery should result in improved performance.

Expectations of strong winter season augur well for its winter portfolio. Maintain Add.

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