MOSL: EMAMI (Buy)-EBITDA above estimate-recovery seen in wholesale channel
​Emami: EBITDA above estimate; recovery seen in wholesale channel
(HMN IN, Mkt Cap USD4.0b, CMP INR1209, TP INR1435, 19% Upside, Buy)
- 2QFY18 sales grew 9.7% YoY to INR6.3b. Domestic revenue rose 14% YoY, with 10% volume growth. The quarter continued to see CSD and wholesale channel destocking, but there has been significant recovery compared to 1QFY18. HMN expects the wholesale channel to return to normalcy in 2HFY18. CSD (3% salience) declined by 20% YoY.
- Gross margin shrank 40bp YoY to 67.3%. Employee expenses were up 20bp YoY. Sharp cut in ad spends (-160bp YoY to 15.7%) and lower other expenses (-50bp YoY to 9%) led to EBITDA margin expansion of 150bp YoY to 32.1%. EBITDA grew 14.9% YoY to INR2b (our estimate: INR1.9b). Adjusted PAT before amortization grew 19% YoY to INR1.6b (our estimate: INR1.4b).
- International (14% salience) sales grew 22% YoY. SAARC and Africa did well. MENAP posted high-single-digit growth. Gained market share across portfolio.
- Concall highlights: (1) Expects 16-17% growth for the remaining year in the domestic business, with 13-14% volume growth. (2) Added 60k outlets in 1HFY18 to reach 780k outlets; targeting 830k by March 2018. (3) Wholesale sales proportion is 42%, down from 50% earlier; targeting 35% by March 2019.
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.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.