Motilal Oswal - Emami (EMAMILTD) MOSL: EMAMI (Buy)-Another quarter of big EBITDA miss-Maintain Buy due to inexpensive valuations

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Motilal Oswal

Krishnan Sambamoorthy

EUR 120.00 For Business Accounts Only

MOSL: EMAMI (Buy)-Another quarter of big EBITDA miss-Maintain Buy due to inexpensive valuations

Emami: Another quarter of big EBITDA miss; Maintain Buy due to inexpensive valuations

(HMN IN, Mkt Cap USD2.3b, CMP INR357, TP INR455, 28% Upside, Buy)

4QFY19 consolidated net sales grew 3.7% YoY to INR6.4b (our est. INR6.5b). Domestic sales grew 3% YoY with flat volumes, while the International business grew 19% YoY. Cons. EBITDA was down 10.7% YoY to INR1.5b (our est. INR1.7b). Cons. PAT before amortization was up 1.3% YoY to INR1.2b (our est. INR1.3b).
FY19 performance: Sales/EBITDA/PAT before amortization growth stood at 6%/1%/0%. EBITDA margin contracted 150bp YoY to 26.9% led by gross margin contraction of 230bp YoY to 65.7%.
Concall highlights: (a) Management will focus on volume-led growth, rather than price-led (~2.5-3%) growth in FY20, (b) Liquidity has been an issue across channels and markets - wholesale, retail, rural as well as urban.

28/05/2019 1 EN

Underlying

Emami

Emami markets personal and health care products. Co.'s brands and products include: Boroplus - antiseptic cream; Navratna - cool oil; Zandu Balm for relief from headaches, backache and cold; Fair and Handsome - cream for men; Mento plus balm for relief of headaches; Fast Relief - pain relief ointment; Zandu Sona Chandi - for immunity; Kesari Jivan - health supplement; Vasocare - herbal skin jelly; Zandu healthcare offers products from healthcare to lifestyle; 7 Oils in One - damage control hair oil and HE - deodorants. Co.'s subsidiaries are engaged in personal and healthcare, newsprint, ball pen tips manufacturing, retail, pharmacy, art, edible oils, healthcare, cement and bio diesel.

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INE548C01032 National Stock Exchange of India India

Provider

Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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Analysts

Krishnan Sambamoorthy

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MOSL: EMAMI (Buy)-Another quarter of big EBITDA miss-Maintain Buy due to inexpensive valuations

MOSL: . EMAMI: Subdued result trend continues

EMAMI sees a downgrade to Neutral on account of less fundamental stars

MOSL: EMAMI (Buy)-Margin outlook getting better; sales recovery key to re-rating

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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