Emami's March-quarter net profit down 59.5% to Rs 23 crore

Homegrown FMCG firm Emami Ltd on Friday reported a 59.44 per cent decline in its consolidated net profit to Rs 22.75 crore for the March quarter due to decline in sales because of coronavirus-induced lockdown.

The company had posted a net profit of Rs 56.09 crore during the January-March quarter of 2018-19,Emami said in a regulatory filing.

Its revenue from operations was down 16.81 per cent to Rs 532.68 crore during the quarter under review as against Rs 640.35 crore in the corresponding period of the previous fiscal.

The pandemic and the lockdown led to a sharp decline in consumption due to rising unemployment and a significant drop in demand from low-income groups, the Kolkata-based firm said.

This led the consumers shift towards more essential items like food, groceries and hygiene products thereby affecting the sale of its discretionary line of products.

All these developments arising out of an unprecedented and extraordinary environment that prevailed across the globe, impacted the company's performance significantly in Q4FY20, the company said.

Emami's total expenses in the fourth quarter of FY20 stood at Rs 434.15 crore, down 10.46 per cent as against Rs 484.92 crore in the year-ago quarter.

For the fiscal year 2019-20, net profit was marginally down to Rs 302.30 crore. It was Rs 302.53 crore in the preceding financial year.

Its revenue from operations in 2019-20 was Rs 2,654.88 crore, down 1.47 per cent. It was Rs 2,694.63 crore in 2018-19.

In FY20, revenues at Rs 2,655 crore marginally declined by 1 per cent due to a 17 per cent decline in Q4FY20.Tight cost control measures helped improve gross margins by 130 bps at 67 per cent and despite one-time write-off amounting to Rs 11 crore, cash profits at Rs 639 crore grew by 2 per cent during the year with margins growing by 80 bps, the company said.

Emami Director Mohan Goenka said financial year 2019-20 has been one of the most challenging years for the company.

While commenting on the outlook Emami Director Harsha V Agarwal said the company has geared to respond to these demands, which are relevant in today's time and has forayed into hand sanitizer, soaps and handwashes under the Boroplus brand and few other products in health care under the Zandu brand.

We are aggressively pushing to launch more products in both personal hygiene and healthcare categories in the next one to two months, he said.

As the current situation is gradually improving to reach normalcy the demand for discretionary products could quickly come back to normal, he added.

Shares of Emami Ltd were trading at Rs 223.55 per unit on the BSE, up 0.88 per cent over previous close.