FMCG company Emami on Friday reported a 2.76% year-on-year fall in its consolidated net profit to Rs 180.13 crore for the second quarter this fiscal even as its revenue from operations grew 3.38% y-o-y during the period.
The company’s net profit had stood at Rs 185.25 crore for the second quarter last fiscal. Revenue from operations increased at Rs 813.75 crore for the period under review from Rs 787.12 crore for the year-ago period, according to a stock exchange filing.
Commenting on the results, Abneesh Roy, executive director, Nuvama Institutional Equities, said the company’s Ebitda margin of 24% was down 1,120 basis points y-o-y owing to inflationary pressures and a sharp increase in ad spends (up 34% y-o-y). Gross margin was down 229 bps y-o-y, but 362 bps higher on a quarter-on-quarter basis.
During the quarter, profit before tax at Rs 186 crore declined by 18% y-o-y due to high inflation in input costs and low base in the Covid period, inclusion of new subsidiary costs, upfront marketing investments and strategic outlays on distribution expansion in rural, digital and modern trade channels, the company said in a release.
Helios Lifestyle (The Man Company) became a subsidiary of Emami after an increase of stake from 49.53% to 50.40%.
Mohan Goenka, vice-chairman and whole-time director, Emami, said consumer demand remained muted across markets with high inflation affecting consumption, especially in the rural markets. “As anticipated, we witnessed a correction in the Covid contextual portfolio of pain management and healthcare products which grew significantly during the last two years. In the given context, the quarter delivered a low single digit growth on a year-on-year basis, however, the 3-year CAGR has been impressive with a high single digit growth of 8% if compared to pre-pandemic levels,” Goenka said, adding that international business maintained its strong run, delivering a double-digit growth of 17%, notwithstanding various global and geopolitical uncertainties.