Emami: Q2FY14 Result Analysis

Emami, came out with impressive set of numbers for Q2FY14. The net sales of the company has witnessed a growth of 12.8% to stand at Rs 407 crore during Q2FY14 as against Rs 360.66 crore reported during the second quarter last fiscal. The EBIDTA came in at Rs 87 crore witnessing a growth of 36.3% during the quarter on a YoY basis. The EBITDA margin shrinked by more than 300 basis points to stand at 21.38% due to higher employee expenses and other expenses both f which are up by more than 20%. The profit after tax stood at Rs 80 crore which gained by 35.1% during the quarter on a YoY basis.

The raw material costs as a percentage of sales stood at 32% for Q2FY14 as compared to 35% seen in Q2FY13. The company in this quarter re-launched Fair and Handsome with improved formulation along with new packaging and new TV commercial with aggressive 360 degree marketing campaign. Also, it launched anti-pollution Face wash range under its 'Boroplus' brand in order to strengthen its position in the fast growing face wash market. For the same the advertisement costs have gone up 5% on YoY basis.

International Business has also performed well in the quarter with 27% topline growth led by aggressive growth in GCC and SAARC. Easing of Input prices coupled with strong cost optimization measures have resulted in margin expansion helping deliver 36.3% EBIDTA growth.

In the filing Mohan Goenka, Director said, "Consumer sentiment and demand for our products continued to be good and robust both in urban & rural trade. We sustained our sales momentum through a strong focus on internal optimization & effective cost management. Easing of the input price pressure, especially for the agro based materials like mentha oil led to a positive impact and margin expansion. International Business has also performed well led by aggressive growth in GCC and SAARC countries."