Emami Ltd, an FMCG major, has announced its plan to deliver a second interim dividend for FY25 to its investors in January 2025. Accordingly, the company has fixed the record date for the upcoming reward. The upcoming dividend will be announced alongside the company's Q3 results for FY25. Brokerages have recommended BUY for a potential up to 61% upside in the stock in the near term. The highest target price is Rs 950.
EMAMI Share Price:
Last week, on Friday, the stock price closed at Rs 591.15 apiece, up by 0.5% with a market cap of Rs 25,956.22 crore on BSE. The stock's 52-week high and low are at Rs 859.20 apiece and Rs 859.20 apiece respectively. Also, it has a price-to-equity ratio of 32.62x, while return on equity is at 28.51%.
Emami Interim Dividend:
The FMCG player will declare its Q3 results for FY25, on January 27, 2025.
In Q2FY25, the company bagged a net profit of Rs 213 crore, up by 19% YoY, while EBITDA surged by 7% YoY to Rs 250 crore with EBITDA margins improving by 110 basis points to 28.1%. Meanwhile, revenue from operations stood at Rs 891 crore, higher 3% YoY.
Emami on November 7th said that it continued to drive its innovation pipeline forward, launching 11 new products this quarter. These include the DermiCool Sweat Reliever Super Active Talc and Ice Cool Shower Gel, as well as the De-Tan & Deep Cleansing Face Wash, Style Lock Shampoo, Fresh Impact Body Wash, Odour Control Shower Gel, and two EDT perfumes under the brand 'HE'.
Mohan Goenka, Vice Chairman and Whole-Time Director, Emami Limited that time said that the Q3 relaunch of Fair and Handsome and focused efforts on Kesh King strengthen our confidence in driving H2 growth. With a favourable winter forecast, we expect a strong performance from our winter portfolio.
Emami Ltd Interim Dividend:
Also, on January 27, the company will consider a second interim dividend for FY25. The company said last week that it fixed Tuesday, 4th February, 2025, as record date for the purpose of ascertaining the name of members/ Beneficial Owners entitled to receive the above Dividend, if declared by the Board of Directors, at the aforesaid meeting.
For FY25, the first interim dividend payout was Rs 4 per share or 400% and its ex-date was on November 18, 2024. Emami has also paid three interim dividends each of Rs 4 per share and their ex-dates were in February 2024, November 2023, April 2023, and February 2023.
Emami BUY Recommendations:
As per IndSec brokerage, growth drivers for Emami are (1) volume-led growth backed by market share gains, (2) growth realization of completed distribution expansion efforts (Project Khoj), (3) Scale-up of The Man Co. and Brillare Science and (4) Double-digit CC growth from International business.
On valuation, the company said," We have revised down our FY25E/26E/27E earnings by 19%/15%/14% respectively and now model in Revenue/Ebitda/Pat CAGR of 8.4%/9.2%/11.4% respectively over FY24-27E," adding, "We value the company at 33x FY27E EPS, giving us a TP of Rs 762" The brokerage updated the rating to BUY on Emami.
Also, Khambatta Securities in its note said, Emami's reported fair sales growth in 2Q FY25 as higher food inflation negatively affected discretionary consumption. Management expects demand to improve in the second half of the financial year, driven by a predicted good winter season. During the quarter, the company launched 11 new products. The healthcare segment saw three new product additions to the Zanducare portal. The new launches are expected to contribute approximately 1% of the company's total sales. Emami anticipates the revival of the Kesh King brand and the re-launch of the male grooming range to be significant growth drivers in the future. The company's continued investment in brands is expected to stand it in good stead in the mid-to-longer term. Basis a P/E of 45x FY26E EPS, we value Emami at Rs 944, reiterating a BUY rating.
The highest target price on Emami is of Rs 950 by Anand Rathi with BUY recommendation.
About Emami:
Emami Ltd, founded in 1974, is one of India's leading FMCG Companies engaged in manufacturing & marketing of personal care & healthcare products. With over 450 diverse products, Emami's portfolio includes trusted power brands like Navratna, BoroPlus, Fair & Handsome, Zandu Balm, Mentho Plus and Kesh King. After a successful takeover of Zandu Pharmaceuticals Works Ltd in 2008, in 2015, the Company acquired the business of 'Kesh King' and forayed into the Ayurvedic hair & scalp care segment.
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