FMCG major Emami Ltd is looking out for acquisitions both in India and international markets to strengthen its footprint, while also tapping at opportunities arising out the coronavirus pandemic, according to a senior company official.
Emami is looking more at strategic fit and potential of the target brand.
FMCG major Emami Ltd is looking out for acquisitions both in India and international markets to strengthen its footprint, while also tapping at opportunities arising out the coronavirus pandemic, according to a senior company official. The company, which is seeking to enhance the contribution of sales from e-commerce channel to 6-7 per cent in the next one to two years from the current 2.5-3 per cent of total sales, is scouting for opportunities to invest or buy majority stakes in digital first brands and companies.
“Of course. To grow inorganically has been one of the strategies for Emami since the last decade or more,” Emami Ltd Director Harsha Vardhan Agarwal told PTI when asked if the company is seeking to tap acquisition opportunities arising out of the COVID-19 pandemic.
Citing the examples of Emami’s acquisitions of Zandu and Kesh King, he said,”Going forward also we are looking for good acquisition opportunities both in India as well as international markets, where we see good strategic fit and where we see the right value.”
When asked if the company is currently in discussions for takeovers, Agarwal said,”Always, there is something on the table, honestly. Even now we are in touch with and have discussions with few companies. These are in India and are at a very preliminary stage.”
With up to Rs 400 crore of cash in hand and debt-free, he said for Emami budget for acquisition is not a constraint but the company is looking more at strategic fit and potential of the target brand. “It can even be regional (brands). Some of the regional brands if we see the potential, we are always open for them,” Agarwal added.
With the company working to enhance its presence in the digital channel, he said,”Apart from that (traditional brands) we are also always looking for opportunities to invest and also if needed buy majority (stakes) in digital first brands and companies.” Elaborating further, he said such an acquisition would be in the area where Emami operates or in newer categories and it will not only give the company increased presence in online channels but would also enhance its “learning curve in the area of digital”.
“It is more in the area of product and services rather than too much technology but yes if there is any company which has some very good technology which has the potential to make an impact on our business, then we can always evaluate that,” he added.
Sharing the company’s ambitions for online channel sales, Agarwal said,”We will be focussing a lot on e-commerce. Though we have grown very fast in the last one-and-half years, still it is around 2.5 per cent to 3 per cent of our sales. Going forward we certainly want to take the contribution of that to at least 6-7 per cent in the next one to two years.” In 2019-20, the company had posted a consolidated revenue from operations of Rs 2,654.88 crore.