“Going ahead, the macroeconomic environment is expected to improve with inflation easing in December and the anticipated stimulus of the union budget should hasten the industry recovery. The upcoming quarter looks promising for the industry due to declining commodity prices, higher crop realization and continuous government interventions. On the industry front, we do believe that going forward D2C and e-commerce would play an important role in the future growth strategy of the FMCG business with omnichannel distribution.”
-Mohan Goenka, Director
Stock Data
| Ticker | EMAMILTD |
| Exchange | NSE & BSE |
| Industry | FMCG |
Share Price
| Last 1 Month | -7% |
| Last 6 Months | -24.5% |
| Last 12 Months | -24.1% |
Emami Business Basics & Diverse Product Portfolio
Emami Limited is a diversified Indian FMCG company that operates in multiple product categories such as personal care, healthcare, beauty, and other segments. The company has a strong presence in India and overseas, with operations spanning over 60 countries worldwide. It has a strong distribution network, which includes over 4,000 distributors and more than one million retail outlets across India. The company also has a growing e-commerce presence, with its products available on popular online platforms. Emami has a reputation for innovation and product development. The company invests significantly in R&D, and as a result, has developed several innovative products and technologies. Additionally, the company has a strong focus on community development, with initiatives focused on education, health, and women’s empowerment.
Emami’s portfolio of brands includes popular and trusted names such as Navratna, Boroplus, Zandu, Kesh King, and Fair and Handsome. These products cater to a wide range of consumer needs and preferences, including personal care, healthcare, beauty & other segments. In the personal care category, it offers a range of products that include hair oils, shampoos, body lotions, talcs, and deodorants. Some of the popular personal care brands from the company include Navratna, Kesh King, Boroplus, and Vasocare.
In the healthcare segment, Emami offers a range of products such as pain relievers, digestive aids, cough and cold remedies, and herbal supplements. Some of the popular healthcare brands from Emami include Zandu Balm, Zandu Chyawanprash, and Zandu Kesari Jivan. In the beauty segment, it offers a range of products such as fairness creams, moisturizers, and face washes. Some of the popular beauty brands from the company include Fair and Handsome, Naturally Fair, and Malai Kesar Cold Cream. It has also recently entered the Ayurvedic and natural products category with the launch of Emami Ayurveda. The product range includes hair oils, shampoos, face washes, and other products that are made using natural ingredients and Ayurvedic formulations. Apart from these categories, the company has also diversified into other segments such as cement and edible oil.
Q3 FY23 Financial Performance
Emami Limited reported Revenue from Operations for Q3 FY23 of ₹982.72 Crore up from ₹971.06 Crore year on year, a growth of 1.2%. Revenue growth slowed as demand patterns for the FMCG sector remained sluggish, and a warmer winter season across the country impacted sales even more. Consolidated Net Profit of ₹ 232.97 Crore, up 6.1% from ₹219.52 Crore in the same quarter of the previous year. The Earnings per Share is ₹5.37 for this quarter.
Performance Updates In Different Segments
Urban-centric new age channels like modern trade and e-commerce continued to grow strongly by 20% and by 45% during the quarter, while rural markets remained subdued. The contribution of the modern trade channel increased by 200 basis points to 10.5% of domestic revenues, while the e-commerce channel’s contribution increased by 260 basis points to 7.9%. Together, modern trade and e-commerce now account for 18.4% of domestic revenues, up from 13.8% in the third quarter of last year. Emami’s brand-new, digitally-first launches throughout the quarter contributed 14% of sales in modern trade and e-commerce, as well as performing well in these new age channels.
Zanducare, the company’s D2C portal, maintained its growth trajectory with a focus on digital-first launches. Both the Healthcare and 7 Oils in One product lines saw growth. However, a warmer winter caused the BoroPlus range to decrease by 3%. The ranges for Pain management, Kesh King, Navratna, and Male grooming all saw declines of 2%, 1%, 6%, and 1%, respectively. However, when we look at a 3-year CAGR, the Healthcare range, 7 Oils in One, and BoroPlus all saw growth.
Emami’s international business expanded by 7% during the quarter, giving it a 13% CAGR over the previous three years. The expansion occurred in spite of difficulties in several important markets, including Bangladesh’s depreciating currency, Sri Lanka’s economic crisis, Nepal’s forex and liquidity crisis. Strong performances in the MENA, Bangladesh, and Southeast Asian markets have largely been responsible for the growth in this segment.
Analysis Of India’s FMCG Industry
The fourth-largest sector of the Indian economy is the Fast Moving Consumer Goods (FMCG) sector. The industry is divided into three main segments: household and personal care (which accounts for 50% of the sector’s share), healthcare (31%), and food and beverages (19% of the sector’s share). About 55% of the revenue share is contributed by the urban segment, and 45% by the rural segment.
From $110 billion in 2020, the FMCG market in India is projected to grow at a CAGR of 14.9% to $220 billion by 2025. Despite widespread lockdowns, the Indian FMCG industry grew by 16% in CY21, a 9-year high. Consumption-led growth and value expansion from higher product prices, particularly for essentials, have driven the growth. In India, the FMCG industry generates about 55% of its total revenue from the urban market. The FMCG market has, however, expanded more quickly in rural India recently than in urban India.
The following are some of the major actions the government has taken to support the FMCG industry in India: According to the Union Budget 2022–23, the Department of Consumer Affairs will receive ₹1,725 crore (US$ 222.19 million) and the Department of Food and Public Distribution will receive ₹215,960 crore (US$ 27.82 billion). With an investment of US$1.42 billion, the government’s production-linked incentive (PLI) scheme offers businesses a significant chance to increase exports.