Consolidated revenue/EBITDA grew by c21% and c30% y-o-y respectively which was slightly better than Bloomberg consensus expectations. Volume growth of c18% y-o-y was aided by Kesh King (Emami’s new acquisition), and ex-Kesh King organic volume growth was c6% y-o-y. Kesh King contributed to 9% of group revenue in Q4. In Emami’s core portfolio, Navratna Cooling oil grew by 4% y-o-y as an extended winter impacted the performance adversely; Balms grew by 12% y-o-y as it maintained its leadership, Fair and Handsome growth was flat, Boroplus (winter cream) growth at 41% y-o-y was impressive as buttressed by the extended winter. Zandu Healthcare portfolio, led by Pancharishta, grew by 30% y-o-y. International business grew by 17% y-o-y in Q4 as aided by strong performance in Bangladesh and MENA region.
Emami targets an organic revenue growth of c15% y-o-y in FY17 (led by volume growth of c12%). Including Kesh King overall revenue growth is likely to be c18% y-o-y and the company aims to generate Rs 3 billion revenue from Kesh King in FY17. We think maximising revenue is the sensible strategy and growth in Kesh King will continue to remain a key catalyst for stock performance given the scepticism that Patanjali has emerged as an active and formidable competition. We have lowered our margin assumptions given the company’s guidance and hence lower our TP to `1,330 (from `1,400).