Emami’s amortisation cost hits Q4 earnings: Shares still in the green

Emami Ltd., one of the leading brands in consumer space, has posted weak earnings as compared to previous quarter.

Net Sales have declined by 15 percent and stand at Rs 670.77 crores as compared to Rs 788.53 crores in the last quarter. EBITDA has declined by 27 per cent and stands at Rs 182.28 crores. EBITDA has declined majorly due to increase in advertising and other expenses. Advertising and other expenses have increased by 122 per cent. Net profit stands at Rs 75.85 crore, which has declined by 43 per cent from the previous quarter.

The company has acquired assets, which has made the company's cash balances weak. Amortisation of Kesh Kings intangible assets has hit the Net Profit of the firm.

On a (YoY) basis the Net sales stand at Rs 2623.79 crores, which saw a surge of around 18 per cent.  EBITDA has increased by 27 per cent and stands at Rs 683.77 crores. However, Net Profits have plunged by 26 per cent.

Depreciation expenses have increased 7 times from the previous year as intangible assets were purchased.

Emami Limited is an Indian company that deals in personal and healthcare consumer products. The company is engaged in manufacturing and marketing of health, beauty and personal care products, that are based entirely on Ayurveda formulation. Emami Limited has over 30 brands under its portfolio.

The shares on the exchanges are trading in the positive, as the only reason to register less profits is the purchase of intangible assets. The shares have opened in the positive as the company is expected to post positive results in Q1FY17, as depreciation costs are expected to decrease.

The shares on the bourses are trading at Rs 1003.55 crores, up by 2.42 per cent.