Emami Ltd vice-chairman and MD Harsha V Agarwal expressed confidence on Tuesday that the FMCG player will have good growth from its personal care and healthcare businesses in the years ahead and the firm expects to grow at 27.9 per cent compound annual growth rate (CAGR) from 2021 to 2027.
Emami which saw its net profit dipping in the year gone by expects its margins to bounce back on the back of inflation moderating.
“The international business seems to have stabilised and is projected for healthy double-digit growth. We invest for the long-term and we will continue investing across e-commerce, modern trade, international business, people and distribution, etc,” Agarwal said in his speech to shareholders at the annual general meeting.
“The outlook at Emami continues to be positive. With inflation moderating, we do not foresee any cost pressures ahead; margins are likely to bounce back during the current year. With the rural outlook continuing to be sound, we are confident of good growth from the personal care and healthcare businesses,” he said.
The company stated that one of the key growth drivers in the FMCG sector is the large and growing population in India, which stands at 1.4 billion people.
Recognising this immense potential market, Emami has undertaken significant projects to target both urban and rural consumers.
Through Project Khoj’, Emami said it has expanded its direct rural reach, adding over 11,000 villages by March 2023 and a cumulative addition of 20,000 villages since April 2021.
This strategic move is expected to enable Emami to tap into the growing rural market and cater to the needs of consumers with lower incomes and limited access to modern retail channels.
Emami is also leveraging technology to enhance its sales and distribution efforts. With Project Sirius’, the company has implemented a predictive selling tool, which has widened the product assortments and strengthened its position in the urban market.
Despite volatile international markets (Russia, Ukraine, Sri Lanka, Nepal and Bangladesh), the Company’s global business grew 20 per cent, Agarwal said.
Our EBITDA margins (excluding strategic investments) were at 26.9 per cent, close to the pre-COVID levels; including strategic investments, EBITDA margins stood at 25.3 per cent, one of the highest in the industry, he said.
The company has also made a notable impact in modern trade reflecting Emami’s adaptability to changing consumer preferences and its ability to make inroads into emerging sales channels, the FMCG firm stated.
The company is focusing on the Dermicool portfolio, which has shown promising results with a salience exceeding 3 per cent of total net sales. Emami aims to build new brands and strengthen the equity of its core brands through various channels, including modern trade, e-commerce, and general trade.
Emami said it will improve its presence in over 6,500 standalone modern trade stores in the top 50 towns through Project SAMT, underscoring the company’s target to expand its market coverage and penetration.
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