EMAMILTD

Strengthens Core Brands, Expands in New Segments

reported a sharp sequential recovery in Q3FY26, aided by GST rate reductions, buoyant winter demand, and proactive brand interventions. With strong rural penetration, expanding e-commerce presence, and renewed focus on core and new-age brands, Emami is positioning itself for sustained growth and margin stability. Attractive valuations relative to FMCG peers suggest potential for re-rating, though seasonality risks remain. Volume Recovery & Domestic Growth - Sequential rebound post-GST cut, with >90% of core portfolio under new regime. - Winter-sensitive categories (Boroplus, pain management) drove demand; together account for >50% of Q3 portfolio salience. - Domestic sales outlook positive, supported by core brand strength and selective expansion in new-age brands. - Organised trade and e-commerce now contribute >50% of domestic revenue mix. Brand Interventions & Innovation - Kesh King rebranding and packaging revamp delivered 10% sales growth in Q3, aided by price hikes. - Higher brand investments expected to drive volume growth in ayurvedic hair care. - Male grooming subsidiaries (The Man Company, Brillare) grew >30% YoY, supported by premium launches and aggressive D2C strategies. - Emerging categories (beauty, personal care, innerwear, footwear) scaling steadily. - New products contributed 4–5% of revenue over past 2–3 years, expected to add another 3% in FY26. Rural & International Strength - Rural markets contribute >50% of sales, making Emami a strong proxy for rural FMCG demand. - International business resilient, with rebound in Bangladesh and rising portfolio relevance globally. - International revenue share expected to increase, supporting diversification. Margins & Valuation - Input costs benign; no near-term margin pressure expected. - Stock trades at 22x FY28E earnings, below 10-year average and at a discount to FMCG peers. - Valuation re-rating possible with sustained innovation and favourable seasonal demand.