Emami ropes in E&Y to assess Nihar

The Kolkata-based Emami group is learnt to have appointed Ernst & Young to evaluate the Nihar brand.

Industry sources said the appointment is a precursor for putting in a formal bid for the hair oil brand of Hindustan Lever. When contacted, company officials declined to comment on the development.

The sources said Emami is keen on acquiring the oil brand to get a presence in the category.

The company has a presence in the oil segment through its Himani Navratna oil, which is an ayurvedic product aimed at multiple uses including pain relief and is not a core hair oil.

Sales of the Nihar brand for the first half of the year were about Rs 55 crore and market sources peg the overall valuation at about Rs 70-80 crore.

Apart from the regular or pure coconut oil, Nihar also has two variants "" Jasmine and Rose "" as part of its portfolio.

The acquisition will provide Emami an easy access to the rural market, where the Nihar brand has as high as 74 per cent share.

The hair oil market in India is just moving from the unbranded to the branded and has tremendous potential for growth as more and more people are switching over to the branded oils.

Emami has a strong presence in the ayurvedic products category with brands such as Boro Plus, Sona Chandi Chyavanprash and the newly launched Fair and Handsome.

For the quarter ended September 2005, the company posted profit after tax (PAT) of Rs 6.77 crore and net sales of Rs 48.96 crore. For the financial year ended March 2005, net sales and PAT stood at Rs 218.55 crore and Rs 29.44 crore respectively.

The current oil market leader Marico is among the other contenders, which include Godrej Consumer and Dabur, said to be in race for acquiring the Nihar brand.

Earlier, Godrej Consumer and Dabur had expressed openness to acquisitions to grow inorganically.