Emami Q3FY14 Net Profit Rises By 31% To Rs 151 Crore

FMCG major Emami, came out with an excellent set of numbers for the quarter ended December 2013. On a consolidated basis the bottom line of the company on a YoY basis for Q3FY14 went up by 31.08 per cent to stand at Rs 151 crore as against Rs 115 crore reported during the same quarter last fiscal. The EBITDA of the company came in at Rs 177 crore for Q3FY14 witnessing a growth of 29.13 per cent on YoY basis. For the same period the EBITDA margins improved by 527 basis points to stand at 30.24 per cent.

Better cost rationalisation has helped the company perform better in this quarter. The raw material cost as a percentage of sales came in at 28 per cent which is down by 70 basis points on YoY basis. Also, the company was able to control its ad spends to Rs 87.85 crore which is 14 per cent lesser than what was reported in Q3FY13. Ad spends as a percentage of sales improved by 359 basis points to 15 per cent for Q3FY14 as against 18.61 per cent for Q3FY13.

The topline of the company grew by 6.6 per cent on YoY basis to stand at Rs 584.67 crore for Q3FY14. The company has stated that unfavourable season and moderation in the growth of FMCG sector has led to this low growth in the top line. However, the company continues to successfully strengthen its market share in most of the categories it is present. The company also declared an interim dividend of Rs 3 per share.

On the export front, International Business has performed well in the quarter with 37 per cent top line growth led by aggressive growth in GCC and SAARC.

Commenting on the results Mohan Goenka, Director at Emami said, "Despite depressed market conditions due to sluggish economy, high inflation and erratic weather, Emami has been able to sustain modest growth. While demand for our products is good leading to continuous increase in market shares in key categories, delayed and erratic winter has affected off-takes in the quarter. International business has performed well with aggressive growth in GCC and SAARC countries. Effective cost management and easing of input prices has helped improve margins and report higher profits."

Apart from better results there are certain other steps that the company has taken which are, repositioning of BoroPlus brand portfolio, launching the BoroPlus Facewash range and also re-launched Fair and Handsome in this quarter. The benefits of which will be visible in coming quarters.

To sum up, the results of the company have been on the better side and buying interest in the stock cannot be ruled out in today's session. This stock can also be looked upon as a long term investment option for investors.