Emami becomes "Thanda thanda, cool, cool!"

Emami is having a roller coaster day today. Intra day, it went down to Rs.1077.75, a decline of 5.5% at which level, buying came in, pushing the stock to an intra day high of Rs.1165, up some 2.25% and even now, it remains firmly in the green, despite the poor Q1FY17 performance, mainly the fall in net profit as all other parameters were actually good.

The company ended the quarter with a consolidated net profit of Rs.57 crore, down 34% (YoY) and this was led by sharp 74% drop in other income component, 184% jump in interest outgo and 3 times rise in tax outgo at Rs.12 crore.  The company blamed the fall in net profit on amortization of Kesh King intangibles by Rs.60 crore v/s Rs.12 crore (YoY).

Its consolidated net sales actually rose 20% at Rs.643 crore. Of this sales, 84% came from domestic markets, 12% from international and 4% from CSD. Total expenses rose 13%, led by 17% increase in raw material prices and 23% increase in advertising costs. EBITDA for the quarter was up 48% at Rs.147 crore and margins showed a good improvement from 18.43% to 22.83%.

Thus the markets have decided to pay attention to the other earning parameters and less on net profit alone.