Quite in contrast to its larger competitor, Hindustan Unilever, Kolkata-based FMCG major, Emami outperformed street expectations climbing on a stellar performance of its flagship brands.
While net sales grew by 20.4% to Rs 490 crore, a volume growth of 11% was the main takeaway of the results. Naresh H Bahnsali, CEO, finance, strategy & business development, Emami group tells Arindam Majumder that the results were according to expectations and the company plans further acquisitions in near future.
What are your views on the results of this quarter?
They are in line with expectations. We have been able to perform both on domestic and international fronts. Our power brands like Navratna Oil, Fair and Handsome, Zandu Balm, mentho Plus Balm have done extremely well and even the market share of all these brands have increased further, our leadership position has been further strengthened.
Apart from these, new launches like Fair and Handsome facewash, Zandu Ultra Power Balm, HE deodrant have also done very well and have contributed around 6% of the domestic turnover.
What about the company’s international business? Are there plans of acquisitions abroad?
Our international business has grown by 33% and that has helped us to achieve a topline growth of 20.4% this quarter. There is focus on evaluating inorganic opportunities. Middle East and SAARC countries are under our focus, we are looking at opportunities which can supplement our presence there
Emami has always been a distributor-based company which has primarily focused on rural markets. Is it changing?
We give equal importance to rural and urban markets. In this quarter, growth has come from rural and urban market.Even, in the urban our presence has increased in modern trade. Our growth from modern trade is around 40% this quarter. We are strenghtening both the positions.
Your annual report said “Emami has extended from a dependence on climatic variations to predictable annuity usage.” Has the company been able to do that?
Though seasons impact the company’s results, round-the-year products like Balm and Fair and Handsome segment has also shown a stellar performance. Round the season products like Balm and Fair and Handsome sales grew by 12% and 16% as compared to 13% and 14% in the previous quarter.
Despite spending on advertisements going up, the results show that you have been able to maintain a good operating margin. Is it due to the price of raw materials prices coming down?
Prices of few raw materials like mentha have gone down and it has increased for few others. But the good EBITDA margin you see is due to our extensive work in cost-improvement techniques. This has resulted in reporting margin expansion. We have also increased the price increase very judiciously. But mind you price rise was normal and according to market force and as it happens every year.
Are there any plans of new launches?
Soon, there would be new launches from the healthcare division. We are also in the initial phase of launching the She Comfort. It has placed in some markets. Commercial campaigning will start soon.
