Emami posts 49% increase in Q2 profit at Rs 99 cr

Net sales surged by nearly 7% at Rs 628 cr

After posting dismal results in the first quarter of the current fiscal year, Emami Ltd bounced back by posting a 49 per cent increase in its net profit at Rs 99 crore for the quarter ended September 30, 2017 while net sales surged by nearly seven per cent at Rs 628 crore.

Net profit of the company was Rs 66 crore in the same quarter of the previous fiscal year.

While the company's domestic business grew by 14 per cent in the period under review, international business, which has been under stress for quite some time, bounced back, growing by 22 per cent. The growth in this business was led by the SAARC, Africa and CIS regions.

Nevertheless, destocking in canteen stores, department and wholesale channel disruption continues, which Mohan Goenka, the company's director, expects to be over in the next 1-2 financial quarters.

"After a challenging first quarter faced with GST apprehensions resulting in substantial wholesale destocking in the second quarter, we have recovered significantly. The worst seems to be getting over," he said.

Abneesh Roy, senior vice president of institutional equities at Edelweiss Securities opined that Emami Ltd embarked on a cost rationalisation drive resulting in its other expenditure overhead going up by only 4.3 per cent which helped push the company's Earnings Before Interest, Tax, Depreciation and Amortisation (Ebitda) by 15 per cent with the Ebitda margin expansion of 208 basis points.