“Earlier, some plans did not work out, which is usual given the current economic scenario, but the promoters are stressing on the need for inorganic growth to give a boost to its top line. Plan is to acquire a brand out of few selected names, as a brand will have its market ready, thus, adding revenue instantly,” the person said requesting anonymity.
“It may take some time for the deal to be finalised but entering a new segment via brand acquisition is being seen as ideal by for the moment by the management,” the person said adding the company was not interested in buying brands abroad. The company spokesperson confirmed the developments without revealing any details.
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A sector analyst said, “Established brand acquisition helps in saving costs and for a company with dealerships like Emami’s, it helps expand its reach within no time.”
The eagerness for acquisitions also comes on the back of subdued revenue growth for the first time in the past quarter. Emami said it had revised annual sales growth target to 15 per cent year-on-year. But Emami is not the only one suffering; most FMCG companies have had to revise sales target primarily due to a dip in urban consumption.
Harsh Agarwal, director at Emami, had also said during the annual general meeting the company was keen on entering the household segment with products such as mosquito coils.
Emami is known for carving new segments, like it did in 2005 with its men’s fairness cream, Fair & Handsome.
GROWTH STORY
* Domestic brand acquisition gains steam for FMCG major Emami.
* Liquid cash of Rs 300 crore fueling aspirations for inorganic growth.
* Plans are afoot to to enter household segment followed up with stronger foothold in health care.
* Rules out inorganic growth options on foreign soil.
* The revival of acquisition comes on the back of subdued growth in revenues.
* During last quarter, Emami, said it has revised its annual sales target to about 15 per cent.