Emami - FMCG at Decent Valuation

Emami needs no introduction since the company name is a consumer brand in itself in India. Consumer brands of Emami are household names since past few generations - BoroPlus, Navratna, Fair and Handsome, Zandu Balm, DermiCool, Mentho Plus Balm, Fast Relief, Kesh King, etc.

Emami Limited is a leading Indian FMCG company that was founded in 1974. The company operates in the personal and healthcare space with products such as skincare, haircare, health and wellness, and other FMCG products. The company is headquartered in Kolkata, India, and has a presence in over 60 countries worldwide.

P&L, B/S, Valuations, and Return Ratios

  • As of 31 Mar 2023, the company has a Mcap:15800 crs, TTM Sales:3340cr, TTM PAT:815cr
    implying a P/E of 18.7 which is low for an FMCG company
  • PAT can vary every quarter with margin fluctuations, so additionally if we can consider MCap/Sales,
  • MCap/Sales currently stands at 4.7, historical high(last 15yrs):13, historical low(last 15 years): 1.7, avg: 5.9
  • Debt free company
  • Keeps doing buybacks from open market and generally during during the period when market falls, hence it gets the best price for buyback due to these 2 reasons . Recent buyback was done during Mar2023 market fall. Hence maintains ROE of 23-28% over 3/5/10year periods
  • Though sales growth has been slower in high single digit CAGR over the years. Profit growth around 12% over a 10year period.
  • Strong moat due to strong Indian brands
    *One negative is that the company also invests in unrelated sports business - football leagues in Kolkata, which I feel could be a distraction. However I have not come across management integrity issues.

SWOT Analysis:


  • Diverse product portfolio
  • Strong market position in India
  • Growing global presence
  • Dependence on the Indian market
  • Limited presence in some FMCG segments, unlike companies like HUL
  • Expansion into new markets
  • Increased demand for natural and herbal products
  • Growing awareness of health and wellness
  • Intense competition in the FMCG industry
  • Changing consumer preferences
  • Increasing raw material costs

Sales growth over the last 10years has been accompanied by sustained profitability.
Emami Ltd has been paying regular dividend to its shareholders. Company has been increasing its dividend payout with increasing profits.
It has been spending about 15-17% of its sales inflow on its brand promotions every year.
Operating profit margins (OPM) of Emami Ltd has been consistent at 24-25% since FY2010. This is a good sign as Emami is able to pass on the increase in the cost of raw material to its consumers easily and protect its margins.

Last 10year return ratios:

Balance Sheet:

Promoter Holding:
Due to consistent buybacks, the promoter holding is increasing. This also helps return ratios.


  • The company has delivered a poor sales growth of 5.11% over past five years. The slaes growth in recent years seem low, so growth is slow
  • Promoters have share pledge of around 30%
  • Diversification in unrelated business like Realty, Hospital, which they are looking to dispose off

Disc: Invested at 390 levels. I am not a registered investment advisor