Emami Q3 profit rises 45% at Rs 209 crore; firm cites sales growth, cost control measures as reasons

Emami products | Representative images

Emami products | Representative images

Homegrown FMCG firm Emami Ltd on Wednesday reported 44.67 per cent rise in consolidated net profit at Rs 208.96 crore for December quarter 2020 helped by sales growth and cost control measures. The company had posted a profit after tax of Rs 144.44 crore for the year-ago period, Emami said in a regulatory filing.

Revenue from operations was up 14.89 per cent at Rs 933.61 crore in the quarter under review as against Rs 812.64 crore in the same period a year ago. During the quarter, both profits and margins of Emami increased significantly. Stringent cost control measures and benign raw material prices, helped the company improve its margins, said Emami in an earning statement.

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Total expenses were at Rs 593.42 crore in the latest quarter, up 8.16 per cent from Rs 548.62 crore in the same period a year ago. Led by a favourable season and a favourable consumption environment, the company posted a strong growth of 16 per cent in its domestic business led by 13 per cent growth in volumes. The quarter witnessed an all-round growth across major brands, said Emami.

While rural markets continued to perform better, growth in urban markets also picked up, it said. All the channels continued to perform well and posted convincing growth with e-commerce channel growing by 3.5x during the quarter. Modern Trade also registered a strong growth of 51 per cent during the quarter, it added.

Emami Director Mohan Goenka said,Some of our brands in the healthcare & hygiene range, winter portfolio and 7 oils have done exceedingly well during the quarter, signifying positive consumer sentiment. Rural offtakes continue to march ahead of Urban, which too has started picking up. Emami’s international business also grew strongly by 26 per cent led by MENAP (Middle East, North Africa and Pakistan) and SAARC regions during the quarter.

Special focus on immunity-boosting products and launch of hygiene range during the ongoing COVID-19 pandemic helped in boosting sales. Further, the strategy of identifying & tapping opportunities in markets with high hair oil usage, with brands like Kesh King & 7 Oils in One paid off well in international markets, it said. However, Emami’s Canteen stores Department (CSD) business declined 27 per cent during the quarter.

Emami Director Harsha V Agarwal said,”Our strategy to focus on immunity-boosting and hygiene range of products and tapping opportunities in the market with high hair oil usage with our brands paid off well in international markets.Our ad-spends having returned to pre-COVID levels, we will continue to invest in our existing brand and categories, to increase market penetration where we believe we have a strong Right-to-Win. Meanwhile, in a separate filing, Emami said, its board has approved payment of a second interim dividend of 400 per cent, which is Rs 4 per equity share of Re 1 each on the equity shares of the company for financial year 2020-21.

On the outlook, Goenka said: We are optimistic to close the year not only on a positive note but expect to post a high single-digit overall growth. Shares of Emami were trading at Rs 481.95 apiece on BSE, down 0.62 per cent from the previous close.