Emami shares shrug off 60% fall in Q4 net profit, rise 8%; here’s why

Shares of Emami Ltd rose 8 per cent today despite the skin care and health care company reporting a 60% fall in Q4 profit. Consolidated profit after tax (PAT) declined to Rs 141.62 crore in the March quarter compared with Rs 354.11 crore in the corresponding quarter last year. Market sentiment around the stock was positive as the earnings came above brokerages’ estimates.

Nirmal Bang expected Emami to report net profit at Rs 117.5 crore down 72.1% year-on-year (down 54.9% quarter-on-quarter).

Similarly, Nuvama Institutional Equities in a review said earnings came above its estimates.

Shares of Emami gained 8 per cent to Rs 415.8 against the previous close of Rs 385 on BSE. The stock opened higher at Rs 389 on BSE. The market capitalisation of Emami rose to Rs 17,916 crore on BSE. A total of 0.46 lakh shares of the firm changed hands amounting to a turnover of Rs 1.83 crore. The stock has gained after four days of fall.

In terms of technicals, the relative strength index (RSI) of Emami stock stands at 52.6, signaling it's trading neither in the overbought nor in the oversold zone. The stock has a beta of 0.3, indicating low volatility in a year. Emami stock is trading higher than the 5 day, 20 day, 50 day and 100 day moving averages but lower than 200 day moving averages.

Net sales for the quarter grew 7.2 per cent YoY to Rs 816.60 crore compared with Rs 761.90 core in the corresponding quarter last year.

Emami said FMCG industry witnessed a mixed demand environment in the March quarter, as discretionary categories like personal care continued to remain muted on account of reduction of non-essential expenditure by rural consumers. Operating profit zoomed 548% to Rs 135.46 crore for the quarter ended March 2023 against Rs 20.90 crore in the corresponding quarter of the previous fiscal.

In the last fiscal, sales zoomed 6.69% to Rs 3405.73 crore against sales of Rs 3192.03 crore in the previous fiscal. However, net profit slipped 23.77% to Rs 639.57 crore in FY23 against Rs 838.99 crore in the previous fiscal. Operating profit fell 9.41% to Rs 862.76 crore for the March 2023 fiscal against Rs 952.37 crore in the previous fiscal.

Emami is one of the leading and fastest growing personal and healthcare company in India, with an portfolio of household brand names such as BoroPlus, Navratna, Fair and Handsome, Zandu Balm, Mentho Plus Balm, Fast Relief and Kesh King.

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