FMCG major Emami Ltd today reported 98.16 per cent drop in consolidated net profit at Rs 1.04 crore for first quarter ended June 30, hit by destocking ahead of GST implementation in domestic market and overseas inventory correction. The company had posted a consolidated net profit of Rs 56.65 crore in the same quarter last fiscal, Emami said in a BSE filing. Net sales during the period under review were at Rs 541.1 crore as against Rs 645.43 crore in the year-ago quarter, a decline of 16.16 per cent. “The quarter witnessed significant destocking in the domestic market due to implementation of GST and also sizeable inventory correction in international markets,” the company said in a statement. Besides, the implementation of GST further impacted domestic rural and wholesale markets that were recovering from demonetisation, it added. “Further, geopolitical conditions in our international markets also impacted the business,” Emami said. Emami Director Mohan Goenka said the first quarter is not representative of the business outlook of the company as apprehensions of GST led to substantial destocking in domestic market. The implementation of the new tax regime created uncertainties at trade level, particularly in wholesale and rural sales channels, he added. “Primary offtakes faced reduction in such a business environment. Going forward, we expect to regain the momentum in the balance period of the fiscal,” Goenka said.
He further said the company expected to deliver a good growth in international business as it has already corrected inventory levels in major international markets over the past few months. Shares of Emami were trading at Rs 1,064.75 apiece in afternoon trade, down 0.86 per cent from the previous close at BSE.