Is This FMCG Stock A Good Buy Ahead of Upcoming Dividend of Rs 4.00 Due On 16th Feb?

Large-cap Emami is an organisation in the FMCG industry. The company was founded in the 1970s and is involved in the production and marketing of personal and healthcare products. Among its many well-known brand names are Navratna, BoroPlus, Zandu, Kesh King, Fair and Handsome, Mentho Plus Balm, 7 Oils in One, and Dermicool. In addition to a 400% dividend for FY24, the firm has released its financial results for the quarter that ended on December 31, 2023.

Emami Dividend

The Board of Directors have "Considered and approved payment of Second Interim Dividend @400%, (i.e., Rs. 4/- per equity share on equity share of Re. 1/- each) for the Financial Year 2023-24. The Record date for ascertaining the names of the members/ Beneficial Owners who will be entitled to receive the Second Interim Dividend is Monday, 19th February, 2024 as intimated vide our letter dated 11th January, 2024," said the company in a stock exchange filing.

Emami Financials

Emami Ltd. recorded a y-o-y rise in its consolidated net profit of 11.88 per cent, from Rs 232.97 crore during the same time in the previous fiscal year to Rs 260.65 crore for the third quarter of the current fiscal year. According to a stock market filing, the company's sales climbed 1.38 per cent YoY to Rs 996.32 crore from Rs 982.72 crore in Q3FY23. EBITDA climbed by 7% to Rs 315 crore in the December quarter, while margins increased by 170 basis points to 31.6%. Total income was Rs 1,013.03 crore, up 2.36 per cent from the same time last year, while total costs were Rs 681.45 crore, up 1% from the year-ago quarter.

Mr Harsha V Agarwal, Vice Chairman and Managing Director, Emami Limited said, "I am happy that we could deliver another quarter of resilient performance along with substantially improved profitability with a 7% growth in EBIDTA and 9% growth in Profit after Tax, despite subdued demand in Q3. Disrupted winter, weak rural demand and continued inflationary woes impacted the winter and discretionary offtakes. We remain committed to deliver volume led profitable growth going forward aided by accelerated scale up of emerging channels, distribution initiatives, ongoing brand and strategic investments coupled with launch of innovative products."

Mr Mohan Goenka, Vice Chairman and Whole‐Time Director, Emami Limited said, "We showcased our adaptability in the face of changing market dynamics to post a resilient revenue growth despite a delayed winter. Our International business posted an impressive 11% constant currency growth led by MENAP region. Our commitment to innovation remains unwavering, marked by the launch of various new innovative products both in domestic and international markets, underscoring our dedication to driving future growth and delivering value to our stakeholders."

Emami Share Price Target

Deven Mehata - Equity Research Analyst at Choice Broking said Emami Limited, currently priced at Rs 469, presents an enticing opportunity in the technical realm. The stock has notably found robust support from the 100-day and 200-day Exponential Moving Averages (EMAs) on the weekly timeframe, indicating a sturdy underlying trend.
With the Relative Strength Index (RSI) modestly at 30, a phase of consolidation or profit booking may be underway. Nonetheless, Emami maintains its position above key EMAs like the 100-day and 200-day moving averages on the weekly timeframe, indicating a solid technical standing.

Investors are advised to keep a close eye on Emami, especially around the levels of Rs 430 and Rs 400. A reversal from these levels could potentially spark significant upward momentum, with targets set at Rs 500 and Rs 540.
Given the current circumstances, it is advisable to buy on dips, with a recommended stop-loss set at Rs 370 to effectively manage downside risk. This strategic maneuver enables investors to capitalize on potential upward movements while safeguarding against unfavourable market shifts.

In conclusion, Emami exhibits promising technical indicators, backed by support from key EMAs and the potential for upward momentum. With vigilant monitoring and prudent risk management strategies, investors can strategically position themselves to capitalize on potential gains in Emami's stock price.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.