Emami shares close higher after Citi raises target price by 32%

Shares of Emami Ltd gained nearly 4% intraday on Friday after brokerage Citi upgraded its rating to ‘buy’ for the FMCG firm. It raised the target price by 32% to Rs 600 from Rs 455 earlier. Shares of Emami rose 3.70% intraday to Rs 543.40 against the previous close of Rs 524 on BSE. The stock opened higher at Rs 542 on BSE. The market capitalisation of Emami rose to Rs 23,797 crore on BSE. A total of 0.26 lakh shares of the firm changed hands amounting to a turnover of Rs 1.39 crore. Later, the stock ended 2.17% higher at Rs 535.35.

In terms of technicals, the relative strength index (RSI) of Emami stock stands at 66.9, signaling it's trading neither in the overbought nor in the oversold zone. The stock has a beta of 0.4, indicating low volatility in a year. Emami stock is trading higher than the 5 day, 20 day, 50 day and 100 day and 200 day moving averages. 

Emami is likely to benefit from investments for its long-term strategic initiatives. The brokerage firm believes that Emami is well placed to benefit from potential recovery in demand trends.

The brokerage expects the company's margin to rise, led by input cost moderation. Emami’s management has guided for 200-250 basis points expansion in EBITDA margin in FY24, and has forecast a gross margin improvement.

Emami reported a revenue of Rs 833.9 crore in the June 2023 quarter against a revenue of Rs 784.6 crore in the corresponding quarter a year ago. Profit rose to Rs 137.7 crore in Q1 against Rs 72.27 crore in the corresponding quarter of the previous fiscal. Operating profit climbed to Rs 190 crore in Q1 against Rs 173.3 crore in the corresponding quarter of the previous fiscal. 

For FY23, net profit climbed to Rs 35,440.5 crore against Rs 45,522 crore profit in FY22. Revenue from operations surged to Rs 3474.7 crore in the last fiscal against Rs 3287.3 crore for the fiscal ended March 2022.  

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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