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Emami Limited Q1 FY'25 Earnings Conference Call Summary
Key Highlights • Date of Call: August 1, 2024 • Revenue: INR 906 crores (10% YoY increase) • Gross Margin: 67.7% • Profit After Tax: INR 153 crores • Market Conditions: Positive performance despite challenges
Strategic Initiatives • Focus on revitalizing underperforming segments. • Emphasis on brand equity and product quality, especially in healthcare (Zanducare line). • First-mover advantage with Zanducare platform leading to expected double-digit growth in healthcare.
Segment Performance • Kesh King: • 15% YoY decline attributed to promotional strategies. • Projected recovery with a 3-4% decline for the year. • Primarily serves rural markets; competition easing. • Digital and New Entrant Portfolio: • Currently in investment phase with lower margins. • Estimated contribution of INR 25 crores (5-6% of overall revenues).
Growth Expectations • Positive demand trends in rural markets noted in July. • Targeting sustainable growth rate of over 5% for Kesh King. • Projected volume growth of 5-6% and value growth of 1-2%.
Pricing and Market Strategy • No aggressive price increases planned for the year. • Improvements in distribution and advertising with increased budget. • Pain Management portfolio performing well during peak season.
Brand Growth Projections • The Man Company and Brillare: Expected growth of 20-25%. • Summer-linked portfolio grew by 27%, while other segments faced challenges. • Kesh King revenue growth from INR 230 crores to over INR 300 crores.
New Product Launches • Zandu Dantveer: Launched in select states with positive initial feedback. • Dermicool Soap: Part of strategy to expand the Dermicool brand.
Conclusion • Commitment to improving performance in underperforming segments. • Openness to inorganic growth opportunities, primarily in India.
Emami Limited Investor Conference Call Summary (May 29, 2024)
Financial Performance • Q4 Results: • 8% volume-led revenue growth in consolidated net sales, reaching 881 crores. • Domestic business growth of 8%, particularly in pain management and healthcare. • Gross margin expanded to 65.8%. • 39% increase in advertising and promotion spending.
Management Insights • Mohan Goenka's Highlights: • Strong margin position attributed to strategic spending and favorable input costs. • Anticipated margin expansion and increased advertising/innovation. • Cautious price increase projection of 2%-2.5% for the year.
• Product Performance: • New age brands like Brillare and The Man Company contributing over 200 crores. • Challenges with Kesh King and Fair & Handsome brands, with revised strategies for growth.
International Business • Stability and Growth: • International business has shown stability over the last 12 quarters. • Anticipated double-digit growth despite macroeconomic challenges in certain regions.
Direct-to-Consumer (D2C) Brands • Performance Updates: • The Man Company achieved over 200 crores in turnover and is EBITDA positive. • Brillare is reducing losses but still in the investment phase.
Growth Expectations for FY25 • Projected Growth: • Confidence in achieving over 10% growth, supported by a strong summer season. • Urban GT growth improved due to targeted initiatives; rural growth remains strong.
Distribution and Market Insights • Distribution Strategy: • Focus on quality distribution, reaching approximately 1 million outlets. • Balancing distribution between larger and smaller outlets to mitigate risks.
• Sales Growth: • Rural growth at 7%, urban growth at 8%, with modern trade and e-commerce at 17% and 37%, respectively.
New Product Launch • Dantveer Toothpaste: • Positive initial traction in online sales; further insights expected by end of July.
Conclusion • Management expressed gratitude to participants and emphasized ongoing engagement.
Emami Limited Q3 FY24 Earnings Conference Call Summary
Financial Performance • Date of Call: February 9, 2024 • Consolidated Revenues: Rs. 996 crores (1.4% increase) • Volume Decline: 0.9% • Challenges: Lower rural demand and delayed winter affected sales of winter products. • Growth Areas: • Non-winter portfolio: 5% increase • International business: 11% increase in constant currency • Gross Margins: Expanded by 290 basis points to 68.8% • EBITDA and PAT: Grew by 7% and 9%, respectively • Dividend: Second interim dividend declared at 400%
Management Insights • Future Growth: Optimism due to favorable economic indicators and strategic initiatives, including new product launches on D2C platform Zanducare. • Ayurvedic Toothpaste: Confidence in Zandu brand's market position; plans to expand distribution beyond online channels. • Kesh King Hair Oil: Acknowledged recent struggles but noted potential for recovery; 5% CAGR growth over four years despite a recent 13% decline.
Market and Sales Channels • Modern Trade and E-commerce: Contributed 22% to sales; growth rates of 10% (modern trade) and 17% (e-commerce). • Zandu Online Performance: Growing customer base primarily composed of millennials.
Product and Segment Performance • Healthcare Segment: Flat sales attributed to Chyawanprash decline; focus on non-seasonal products for growth. • Volume Growth Target: Aiming for 6-8% despite market challenges. • Material Costs: Stable input costs; potential price increases of 2-3% anticipated.
Competitive Landscape • Market Segments: OTC products, medico marketing, and D2C sales. • Growth Potential: Vitality and supplement categories; competition from both larger and smaller players. • D2C Performance: Strong growth from digital-first products.
Financial Projections • Effective Tax Rate: Projected to remain around 10% due to MAT credit entitlements. • Net Cash Available: Approximately Rs. 400 crores.
Conclusion • The call concluded with expressions of gratitude from the management team.
Emami Limited Investor Conference Call Summary (November 6, 2023)
Financial Performance • Q2 Results: • Consolidated revenues increased by 6% to ₹865 crores. • Domestic sales grew by 4%, with strong urban channel performance. • Notable brand growth: • Navratna and Dermi Cool up by 12%. • International sales up by 16%. • Gross Margins: Significant expansion reported.
Future Outlook • Market Challenges: • Rural market recovery is muted. • Optimism due to expected agricultural yield improvements and government spending. • Dividend: 400% interim dividend declared.
E-commerce and Modern Trade • Channel Growth: • E-commerce and modern trade now account for 25% of business. • Current lower margins but potential for improvement.
Brand Performance • Kesh King: • Recent declines attributed to cyclical factors; growth expected in the next quarter. • The Man Company and Brillare: • Significant growth from premiumization and new product launches.
Strategic Initiatives • Boroplus Portfolio: • Shift towards lotions, now 20-22% of total sales. • Project Khoj: • Focus on enhancing distribution and solidifying gains.
International Growth Concerns • CIS Region: • Challenges due to currency devaluation and geopolitical issues. • Zandu Growth: • Only 4% growth in Q2; expectations for better performance in Q3.
Guidance and Expectations • Growth Projections: • Confidence in achieving high single-digit growth and 200 basis point margin expansion. • Competitive Landscape: • Minimal pressures except for a new entrant in the cool oil segment.
Conclusion • Management expressed gratitude to participants and confidence in future performance.
Emami Limited Earnings Conference Call Summary (May 31, 2023)
Financial Performance • Q4 Revenue Growth: 9% increase, totaling INR 836 crores. • Full-Year Revenue: INR 3,406 crores, reflecting a 7% increase. • Domestic Business Growth: 5% in Q4 and 4% for the year. • International Business Growth: 19% in Q4 and 20% for the year. • EBITDA: 22% increase in Q4; full-year EBITDA declined by 9%.
Product and Brand Insights • New Product Launches: 20 new products introduced. • Key Brands: Dermicool and The Man Company contributed significantly to revenue. • Advertising Spend: Stabilized around 15.5% of net sales, expected to increase to 16.5%-17% in FY '24.
Challenges and Opportunities • Healthcare Business Decline: Attributed to previous COVID-related sales spikes. • Seasonal Impact: Summer portfolio affected by unseasonal rains. • Growth Targets: Ambitious targets for start-up businesses, particularly The Man Company (50%-60% growth expected in FY '24).
Strategic Initiatives • Rural Expansion: Project Khoj aims to reach 60,000 towns and villages by FY '24. • Direct-to-Consumer Focus: Emphasis on digital-first brands contributing to modern trade e-commerce.
Operational Insights • Organic Volume Growth: 2% overall; negative when excluding certain brands. • Cost Management: Increased expenses due to distribution projects and forex remittance issues. • Divestment Plans: Pending hospital deal awaiting government approval.
Management Outlook • Future Growth: Optimism for improving macroeconomic conditions and strategic investments. • International Business Confidence: Anticipated 20% growth in international markets. • Long-Term Infrastructure: Investments in rural distribution expected to support future growth despite short-term challenges.
Conclusion • Management expressed gratitude to participants and IIFL for organizing the call, highlighting confidence in achieving growth targets and addressing challenges effectively.
Emami Limited Q4 FY '23 Earnings Conference Call Summary
Company Performance • Economic Environment: Challenging conditions with high rural inflation and reduced consumer spending. • Revenue Growth: • Q4 revenue: INR 836 crores (9% growth). • Full-year revenue: INR 3,406 crores (7% increase). • Domestic Business: • Q4 growth: 5%. • Full-year growth: 4%. • Key brands contributing: Dermicool, The Man Company. • International Business: • Q4 growth: 19%. • Full-year growth: 20%.
Financial Highlights • Gross Margins and EBITDA: Improvements noted, but full-year EBITDA declined by 9%. • Advertising Spend: Consistent at 16.5%, with potential increase to 17% next year.
Brand Performance • Fair and Handsome: 29% growth attributed to base effect; recent growth has moderated. • Healthcare Business: Decline due to previous COVID spikes; expected growth to resume. • Kesh King: Projected 10% growth for FY '24 despite weak summer season.
Strategic Initiatives • Distribution Expansion: Targeting 60,000 towns and villages by FY '24. • Digital-First Brands: Focus on innovation in digital channels. • Start-Up Initiatives: Projecting 50-60% growth, particularly for The Man Company.
Impairments and Investments • Brillare Science: INR 32 crore impairment due to lower growth; no significant impairments anticipated for FY '24. • Long-Term Investments: Confidence in achieving growth targets, especially in international and healthcare segments.
Rural Expansion Strategy • Market Penetration: Increased reach from 32,000 to 52,000 locations; high repeat rate of over 85%. • Digitization of Sales: Improved control and visibility in rural markets.
Closing Remarks • Optimism for Future: Confidence in growth despite seasonality and economic challenges. • Management of Forex Issues: Effective handling of forex challenges in Bangladesh.
Emami Limited Q3 FY '23 Earnings Conference Call Summary
Date and Context • Date of Call: February 3, 2023 • Transcript Released: February 7, 2023 • Quarter Ending: December 31, 2022
Financial Performance • Net Sales: INR 975 crores (2% growth) • Revenues: INR 983 crores (1% increase) • Domestic Volumes: Declined by 3.9% • E-commerce and Modern Trade: Strong growth noted • Gross Margins: Contracted due to inflation • Profit After Tax: Increased by 8% • Interim Dividend: 400% announced
Management Insights • Demand Trends: Muted demand, particularly in January • Kesh King Brand: Smaller decline than overall category (down 10%) • Healthcare Growth: Expected from new D2C product launches • Employee Costs: Increased, expected to stabilize around INR 90 crores • Tax Rate: Projected at 10-12% due to MAT credit
Future Guidance • Margin Stabilization: Expected around 27% next year • New Chief Growth Officer: Mr. Giriraj Bagri appointed to drive growth strategies • Project Khoj: On track to expand distribution to 50,000 towns and villages
Distribution and Sales • Rural Channel Performance: Flat year-over-year, generating INR 67 crores • Cost Increase: Modest 7.8% increase in rural channel costs
Market and Product Insights • Healthcare Portfolio: Growth expected to accelerate post-Q4 • Revenue Growth Projection: 10-12% for FY '24 • Pain Management Segment: Decline attributed to high base, not competition • International Market: Weaker quarter noted, but double-digit growth expected overall
Conclusion • Shipments: Expected to resume between January and March • International Growth Projection: Approximately 14-15% for FY '23 • Management's Outlook: Aggressive marketing and distribution expansion planned despite challenges.