Emami Ltd

Emami hit a new 52-week after it declared its Q2FY13 numbers. The company posted a consolidated net profit at Rs.59 crore, up 17% (YoY) on a 18% rise in net sales at Rs.361 crore.  The good numbers were on the back of very good growth in topline helped by sales in its brands, mainly Zandu and Boroplus. Its international business grew by a 3% at Rs.46 crore and its domestic business grew 22%at Rs.299 crore and this was mainly on account of the 7% price rise. The best part of the numbers were the margins, especially the gross margins, which rose from 26.35% to 29.17% (QoQ). This was despite the sharp rise in raw material cost. The company hopes to maintain margins around the same levels through the rest of the fiscal.

The company is doing well in the FMCG sector because it has created a niche for itself by entering the sector of specalised oils, like Navratna , which has a strong brand presence. Its other brand, Boroplus has also got instant brand recognition and the logical extension in both these brands has helped boost sales. Its fairness cream for men, ‘Fair and Handsome’ is the market leader in the category and has been able to beat the might of MNC FMCGs like Nivea and Garnier. ITC is also planning to come with a similar cream but Emami’s brand is unlikely to be affected by this entry in the short term.