Buy Emami, target price Rs 590: Emkay Global

Emkay Global has buy call on Emami with a target price of Rs 590. The current market price of Emami Ltd. is Rs 474.25. Time period given by analyst is one year when Emami Ltd. price can reach defined target.

Emami Ltd., incorporated in the year 1983, is a Mid Cap company (having a market cap of Rs 20848.75 Crore) operating in FMCG sector.

Emami Ltd. key Products/Revenue Segments include Personal Care and Other Operating Revenue for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 988.48 Crore, up 19.61 % from last quarter Total Income of Rs 826.45 Crore and up 4.85 % from last year same quarter Total Income of Rs 942.79 Crore. Company reported net profit after tax of Rs 222.81 Crore in latest quarter.


Investment Rationale
Expect sales growth of 5% on a high base of 37% growth in Q4FY21. Gross margin is estimated to contract by 120bps yoy due to higher input inflation. EBITDAM is expected to stay largely flat, benefitting from lower employee costs.

Promoter/FII Holdings
Promoters held 54.27 per cent stake in the company as of 31-Mar-2022, while FIIs owned 12.72 per cent, DIIs 24.32 per cent.