Release Date: May 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Emami Ltd (BOM:531162, Financial) reported an 8% growth in consolidated net sales, reaching INR881 crore.
- The company's domestic business grew by 8%, with a healthy volume growth of 6.4%.
- The BoroPlus range saw a significant growth of 32% due to extended winters.
- International business grew by 9% in constant currency terms and 8% in INR terms, driven primarily by the MENA region.
- Gross margins expanded by 270 basis points to 65.8%, and EBITDA grew by 6% to INR211 crore.
Negative Points
- Male Grooming range and Kesh King range were impacted by lower discretionary consumption, declining by 2% and 9% respectively.
- Despite geopolitical crises and currency depreciations in key geographies, the international business faced challenges.
- The company had to invest heavily in brand-building activities, resulting in a 39% increase in A&P spends.
- The summer portfolio growth was not as strong in Q4, likely due to a delayed winter.
- E-commerce profitability is slightly lower than other channels due to higher discounts and offers.
Q & A Highlights
Q: Are you seeing a rural pickup in your sales numbers or is it more a reflection of Nielsen data?
A: We are seeing signs of recovery in our internal numbers, not just Nielsen data. This trend is evident in both urban and rural areas. (Mohan Goenka, Vice Chairman of the Board, Whole Time Director)
Q: The non-seasonal categories like pain and healthcare have seen some pickup. Is this due to distribution initiatives or overall market improvement?
A: Our distribution initiatives have been ongoing, but we are also seeing recovery across channels, indicating overall market improvement. (Mohan Goenka, Vice Chairman of the Board, Whole Time Director)
Q: On margin front, do you expect EBITDA margin expansion in FY25?
A: We are well-positioned for margin expansion due to benign input costs. We expect some margin expansion this year. (Mohan Goenka, Vice Chairman of the Board, Whole Time Director)
Q: How has the summer portfolio performed in Q1 given the severe season?
A: The summer season has been severe, and we are benefiting from it, seeing good numbers in our summer portfolio. (Manish Gupta, President - Sales, Consumer Care Division)
Q: With the market outlook improving, do you see an increase in innovation and A&P spends?
A: Yes, we are well-positioned with new launches in the pipeline and will be aggressive in our investments and innovation going forward. (Mohan Goenka, Vice Chairman of the Board, Whole Time Director)
Q: What is the growth outlook for the international business given recent volatility?
A: We expect double-digit growth in the coming quarters despite macroeconomic issues like political disturbances and currency fluctuations. (Vivek Dhir, Chief Executive Officer- International Business)
Q: Can you provide details on the performance and profitability of The Man Company and Brillare?
A: Both brands contributed over INR200 crore in revenue for FY24. The Man Company is now EBITDA positive, while Brillare is still in the investment phase but has reduced losses significantly. (Rajesh Sharma, President - Finance and Investor Relations)
Q: What are your growth aspirations for FY25?
A: We expect more than 10% growth for the financial year, driven by a strong summer season and lower bases for winters. (Mohan Goenka, Vice Chairman of the Board, Whole Time Director)
Q: How has the GT channel performed recently, and what are your expectations for FY25?
A: We have increased focus on urban GT and are seeing positive results. We expect continued growth in this channel. (Manish Gupta, President - Sales, Consumer Care Division)
Q: Can you break down the current quarter sales between rural and urban growth?
A: Rural growth was in mid-single digits, and urban growth was in low single digits. Modern trade grew by 17%, and e-commerce by 37%. (Manish Gupta, President - Sales, Consumer Care Division)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
