Emami Ltd

Emami hit a record new high as a reaction to the exciting Q1Fy16 numbers posted by the company. It posted a very healthy 24% (YoY) jump in consolidated net profit at Rs.88 crore on a 21% increase in total income at Rs.608 crore. The company’s main raw material is mentha, accounting for over 25% of its cost. Though the prices have remained benign for some time, prices have started moving up since March’15- raw material prices in current Q1 have shown a YoY 22% rise and a 14% rise QoQ. With mentha oil production expected to fall short of target, prices are expected to rise further. But for Emami this could be offset against a lower crude price and it stands to benefit from lower crude-linked derivative like packaging.

EBITDA for the quarter rose 33% at Rs.100 crore and margins rose to 16.95% v/s 15.56%. Other income was down 18% and interest cost showed an over 5 times rise to Rs.4.34 crore. This was more or less offset by the good reduction in tax outgo – from Rs.21 crore to Rs.4 crore. Total costs also showed an increase of 20%. So if the company’s topline had shown a commensurate rise, the bottomline would have suffered. Thanks to the higher sales, the company ended the quarter with a very good bottomline.