Khambatta Securities has given Buy recommendation for Emami with a target price of Rs. 667 in its research report issued on Nov 02, 2021
Khambatta Securities’ research report on Emami
Emami Limited has reported modest growth for 2QFY22 considering the high base in 2QFY21. Top-line increased by 7.4% y-o-y. The Operating Revenue stood at ₹788.8 crores in 2QFY22 against ₹734.8 crores reported in 2QFY21. The EBITDA margins have witnessed a marginal improvement of 15 bps Y-o-Y to 35.1%. The PAT jumped by 56.4% and 138% on Y-o-Y and Q-o-Q basis respectively. The net profit margin for 2QFY22 has increased by 736 bps to 23.5% as compared to 16.1% reported in 2QFY21. Pain management and Healthcare range have witnessed a modest sales growth of 6% and 5% y-o-y respectively. The sales for Navratna range has declined by 9% in 2QFY22 whereas the Boroplus range, Kesh king range and the Male grooming range have performed well registering a growth of 29% ,15% and 15% respectively.
The stock currently trades at forward P/E level of 28x FY24E EPS. We roll forward our valuation to FY24 earnings and value the stock at 34X FY24E EPS at ₹ 667, informing a BUY rating with an upside potential of 22% from the current levels.