Emami (531162) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 began positively, with consolidated revenue reaching INR 906 crore (Rs. 90,607 lacs), up 10% year-over-year, driven by strong summer portfolio and strategic initiatives, especially in rural markets and digital channels.

• Domestic business grew 10% in value and 8.7% in volume, while international business grew 11% in constant currency, led by MENA and SAARC regions.

• New product launches included Dermicool for Her, Dermicool soap, and digital-first products under Kesh King and ZanduCare, with marketing campaigns boosting brand visibility.

• The Board approved unaudited standalone and consolidated results for the quarter ended June 30, 2024, with a qualified auditor's conclusion due to unreviewed components.

Financial highlights

• Consolidated revenue from operations for Q1 FY25 was INR 906 crore (Rs. 90,607 lacs), with PAT at INR 153 crore (Rs. 15,060 lacs), and EBITDA at INR 216 crore (Rs. 22,697 lacs), all up year-over-year.

• Gross margin improved to 67.7% (up 230 bps), EBITDA margin rose to 23.9% (up 90 bps), and PAT margin reached 16.8%.

• Advertising and promotion spend increased 21% YoY, now at 20.3% of revenues.

• Basic and diluted EPS (consolidated) for Q1 FY25 was Rs. 3.50, up from Rs. 3.13 in Q1 FY24.

• No exceptional items reported in Q1 FY25; previous year included a VRS compensation.

Outlook and guidance

• Focus remains on sustainable, profitable, volume-led growth, expanding distribution, and investing in key brands.

• Management expects growth to accelerate with a normal monsoon and positive macroeconomic trends, but guidance remains cautious due to external uncertainties.

• Expectation of 5-6% volume growth and 1-2% value growth, with double-digit revenue growth possible if favorable conditions persist.

• MAT credit recognized during the quarter is expected to be utilized in future years based on projected profits.