FMCG major Emami said on Tuesday that its board will consider a proposal for buyback of equity shares this week. This would be the third round of buybacks, which would help promoters raise stake in the company.
“…we wish to inform you that a meeting of the board of directors of the company is scheduled to be held on March 24, inter-alia to consider a proposal for buyback of fully paid-up equity shares of the company,” Emami said in a stock exchange filing.
The FMCG maker had in March, 2020 announced up to Rs 191.99 crore share buyback offer at a maximum price of Rs 300 per share. Its board of directors had also approved buyback of the company’s fully paid-up equity shares having a face value of Rs 1 each for an aggregate amount not exceeding Rs 162 crore in February last year.
The two rounds of buybacks helped the promoters raise their shareholding in the company. At the end of the third quarter this fiscal, promoter & promoter group hold 54.27% in Emami.
Notably, the promoters had sold a 10% stake in the company for Rs 1,230 crore in June, 2019, mainly to reduce debt at the promoters level. The company had divested the stake to marquee institutional investors on the floor of the stock exchange. Subsequent to the stake sale, promoter stake in Emami Ltd had stood at 52.74%.
The company reported a 6.13% year-on-year rise in its consolidated net profit to Rs 232.97 crore for the third quarter this fiscal from Rs 219.52 crore for the corresponding period last fiscal. Revenue from operations during the period grew 1.2% y-o-y at Rs 982.72 crore compared with `971.06 crore for the same period of FY22.
“Domestic revenue grew 1% YoY led by pricing as volume dipped 3.9%. International business grew 7% YoY despite key markets facing geopolitical issues. However, sales declined across the product range except ‘7 oil in one’ and healthcare as a segment. Hair oil also weighed on growth (Kesh King/Navratna declined 1%/6% YoY) owing to poor rural demand. Margins fell due to inflation and a poor mix,” Abneesh Roy, executive director & Head of research committee, Nuvama Institutional Equities, said in a note on Emami’s third quarter results.