Sharekhan has given Buy recommendation for Emami with a target price of Rs. 635 in its research report issued on Jun 07, 2021
Sharekhan’s research report on Emami
Healthcare category grew by 45% in FY2021; management confident of growing it by 20-22% in FY2022 on improved penetration and strong traction to new launches. Liquidity remains strong as Emami’s cash & cash equivalents stand at Rs. 350 crore. Dividend payout improved to 78%. Return ratios remained strong with RoE and RoCE of 37.5% and 42.5%, respectively. Stock has given handsome returns of 2.6x, outperforming broader indices. Current valuations of 25x its FY2023E EPS remain attractive in FMCG space.
We maintain a Buy on Emami with a revised price target of Rs. 635. Strong growth prospects and receding risk of promoter’s pledging make it a better pick in the FMCG space.