Emami’s Promoter Pledge to be Reduced to 15% by FY2024-end
Emami’s promoters have received the required approvals to sell their stake in AMRI Hospitals. This will help to reduce the promoters’ pledge in Emami to 15% by the end of FY2024. The company is also looking to sell other assets to further reduce the promoters’ pledge to low single-digit levels by H1FY2025.
Emami is expected to achieve high single-digit revenue growth in FY2024. If the winter season is strong, revenue growth could be in the range of 10-12%. EBITDA margin is expected to expand by 200-250 basis points (bps) year-on-year.
The company’s focus is on achieving revenue growth of 12-14% by expanding its reach in the rural market, scaling up its acquired and new ventures (including The Man Company), and growing its international business at a strong double-digit pace. EBITDA margin is expected to remain in the range of 27-28%.
We reiterate our Buy rating on Emami with a revised target price of Rs. 655. The discounted valuation of 27x/23x its FY2024E/FY2025E earnings per share (EPS), the reduction in promoters’ pledge, and the improving growth prospects make it a good pick in the mid-cap FMCG space.
In summary, Emami is a well-managed company with a strong track record of growth. The recent approvals for the sale of AMRI Hospitals will help to reduce the promoters’ pledge and improve the company’s financial flexibility. We expect Emami to continue to grow at a healthy pace in the coming years
Related News
- 22 Sep
NBCC shares trade higher on Rs 100 crore work order from SAIL
NBCC shares were trading 3 percent higher on September 22 after the company announced having bagged a work order worth Rs 100 crore from SAIL. This is the fourth order-win announced by the company in this month, the total value of the same being Rs 450 crore. NBCC is a public sector undertaking engaged in the business of construction and real estate development. The company specializes in providing project management, consultancy and engineering services for civil construction, infrastructure development, and real estate projects.
- 22 Sep
Glenmark Pharma stock falls on stake sale in Glenmark Life Sciences
Glenmark Pharma stock fell after the company announced it would sell a 75% stake in its subsidiary Glenmark Life Sciences to Nirma. Analysts expect the stake sale to benefit Glenmark Pharma, as it will transition from a net debt position to a cash surplus position. This is expected to have a positive impact on the company's return ratios over the next two to three years.
- 22 Sep
Berger Paints Shares Hit 52-Week High After Turning Ex-Bonus
Berger Paints shares surged 6% to hit a 52-week high after turning ex-bonus on the record date for the issue of bonus shares in the ratio 1:5. The company posted a net profit of Rs 326.3 crore in the April-June quarter of FY24, up 39% year-on-year, on revenue of Rs 2,739.7 crore, up 10% year-on-year. The company expects to get net cash positive by the end of this fiscal year and expects to end the year with double-digit revenue growth on strong demand outlook.
- 22 Sep
Market Update for September 22, 2023
IdeaForge Tech up 3.4% on order RVNL up 3% on highway MoU JSW Steel up 0.4% on sale ICICI Lombard down 1.6% on CEO exit ICICI Bank down 1% on healthcare investment NHPC up 1.3% on extended additional charge Kalyani Forge up 3.2% on new MD IRB Infra up 2.5% on road project closure
- 22 Sep
Lux Industries Shares Down 3% After Income Tax Raid
Lux Industries shares fell 3% on September 22 after news emerged that the Income Tax department had conducted searches at the company's premises in Kolkata and alleged a tax evasion of Rs 200 crore. The company has confirmed the searches and is extending full support.
Leave a Reply