Motilal Oswal has given Buy recommendation for Emami recommended buy rating on the stock with a target price of Rs 510 in its researc with a target price of Rs. 510 in its research report issued on May 13, 2022

Motilal Oswal’s research report on Emami

Emami’s consolidated sales growth of 5.4% YoY (flat volume growth) was broadly in line with our expectation. However, higher-than-anticipated material costs and 10% absolute increase in ad-spends YoY (at a time when peers have been reducing the same to offset material cost-led pressures) resulted in an 18% miss on EBITDA for 4QFY22. It is heartening, though, that Emami is investing on growth. On a full-year basis, its ad-spends-to-sales ratio expanded 50bp YoY and its investments on Project Khoj (to augment rural distribution) also continued.


While sales growth continued to be unimpressive for a company of its size (with a five-/three-/two-year CAGR of 5.1%/5.8%/9.7%, respectively), the trend is getting relatively better. Maintain BUY with a TP of INR510.

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