karvy on emami ltd

8/17/2019 Karvy on Emami Ltd

1/121

Apr 30, 2016

Emami LtdConsumer Staples-Household Products

Emami Ltd

India Research - Stock Broking BUY

Bloomberg Code: HMN IN

Recommendation (Rs.)

CMP (as on Apr 29, 2016) 1007

Target Price 1313

Upside (%) 30

Stock Information

Mkt Cap (Rs.mn/US$ mn) 228500 / 3440

52-wk High/Low (Rs.) 1368 / 870

3M Avg. daily volume (mn) 0.2

Beta (x) 0.7

Sensex/Nifty 25607 / 7850

O/S Shares(mn) 227.0

Face Value (Rs.) 1.0

Shareholding Pattern (%)

Promoters 72.7

FIIs 16.3

DIIs 1.2

Others 9.8

Stock Performance (%)

1M 3M 6M 12M

Absolute 10 (0) (4) 7

Relative to Sensex 7 (3) 1 14

Source: Bloomberg

Relative Performance*

Source: Bloomberg; *Index 100

Analyst Contact

Kunal Jagda

040 - 3321 6277

[email protected]

Market Leader of Cooling Hair Oil, Beating the Heat

High Margin Products in the Portfolio are expected to drive EBITDA growthahead of Sales growth: Recent acquisition of Kesh King Brand, accounts foraround 75% gross margin and 45% EBITDA margin as compared to the other

products in the portfolio. Kesh King Brand is expected to drive the top line growth

by around 8% to 10% additionally. This will enable Emami to record higher margins

in FY17E and FY18E.

Marching ahead in the league of Herbal Products: Zandu accounts for ~25%of the total revenue of Emami, with over 200 products in the portfolio under the

Zandu Brand. The company is also expected to extend the brand with couple of

new products; with the most recent launch of Zandu Honey, Emami is currently test

marketing these new products and it is expected to launch these products by the

end of FY17E.

Market Leader of Cooling Hair oil is beating the Heat: The best seller ofall times, Emami’s Navratna cooling oil enjoys around 60% of the total market

share. The rising temperature across India is expected to give robust growth to

its Navratna cooling oil, Navratna Cool Talc and to Boroplus prickly heat powder.

Historically, cooling oil has recorded 16% to 17% growth during moderate summer,

so considering the current weather condition it is expected to grow at good pace.

Valuation and Outlook

At CMP of Rs.1007, the stock is trading at P/E of 29.5x for FY18E. With theanticipated increase in top line due to high margin products in the portfolio, rising

temperature across India, strong brand positioning, innovation and new product

launches which were favourably received by the market, with strong balance sheet

& nancial ratios, we expect that the consumer expenditure will further increase as

the economy revives and hence there will be growth in Emami’s top line and bottom

line as well. Based on P/E of 38.5x, we initiate the coverage with a “BUY” rating

for a Target Price of Rs.1313 representing an upside of 30% for a period of 12-15

months.

Key Risks

y Competition. y Volatility in raw material prices.

For private circulation only. For important information about Karvy’s rating system and other disclosures refer

to the end of this material. Karvy Stock Broking Research is also available on Bloomberg, KRVY ,

Thomson Publishers & Reuters

Exhibit 1: Valuation Summary

YE Mar (Rs. Mn) FY14 FY15 FY16E FY17E FY18E

Net Sales 18208 22172 25334 29473 34504

EBITDA 5023 5401 5784 6992 8634

EBITDA Margin (%) 27.6 24.4 22.8 23.7 25.0

Adj. Net Prot 4025 4856 5240 6309 7743

EPS (Rs.) 17.7 21.4 23.1 27.8 34.1

RoE (%) 47.1 44.9 38.3 37.9 38.1P/E (x) 24.5 46.8 40.4 36.2 29.5

Source: Company, Karvy Research, *Represents multiples for FY14 & FY15 are based on historic market price

70

90

110

130

150

A p r - 1 5

M a y - 1 5

J u n - 1 5

J u l - 1 5

A u g - 1 5

S e p - 1 5

O c t - 1 5

N o v - 1 5

D e c - 1 5

J a n - 1 6

F e b - 1 6

M a r - 1 6

A p r - 1 6

Emami Sensex

http://www.karvy.com/


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Apr 30, 2016

Emami Ltd

Company Background

Emami Group established in early 1970s, has grown in India,

with its presence in major sectors like FMCG, Real Estate,

Hospitals, Retail, Newsprint Manufacturing, Pharmacy chain,

Contemporary art, Edible oil and biodiesel. Founded by two

friends Mr. R.S. Agarwal and Mr. R.S. Goenka, today Emami

is a trusted brand of the nation with over 25,000 employeesand with a group turnover of about Rs.100 Bn. Emami Ltd is

one of the leading and fastest growing personal and healthcare

businesses in India, with an enviable portfolio of household

brand names such as Boroplus, Navratna, Fair and Handsome,

Zandu balm, Mentho Plus balm and Fast Relief. With seven

manufacturing locations in India and one in Bangladesh

supported by a widespread distribution network, the company

is positioned to make its products available in every corner of

the country. Emami has received countless accolades for its

innovative and clutter-breaking products, which have carved

out whole new segments from scratch in the Indian FMCGspace and positioned the company as one of the fastest

growing and most proftable companies in the sector.

Exhibit 2: Shareholding Pattern (%)

Source: BSE, Karvy Research

Exhibit 3: Geography-wise Revenue Segmentation - FY15 (%)

Source: Company, Karvy Research

Balance sheet (Rs. Mn)

FY15 FY16E FY17E FY18E

Total Assets 16763 20273 24278 29197

Net Fixed assets 4776 4917 5359 5797

Current assets 5834 7693 10009 13155

Other assets 6153 7663 8910 10245

Total Liabilities 16763 20273 24278 29197

Networth 12306 15023 18293 22307

Debt 194 194 194 194

Current Liabilities 3688 4451 5147 6002

Other Liabilities 574 605 645 694

Balance Sheet Ratios

RoE (%) 44.9 38.3 37.9 38.1

RoCE (%) 43.1 37.0 36.7 37.1

Net Debt/Equity (x) (0.3) (0.3) (0.4) (0.4)

Equity/Total Assets (%) 73.4 74.1 75.3 76.4

P/BV (x) 18.5 14.1 12.5 10.2


Cash Flow (Rs. Mn)


PBT* 5924 6547 7884 9676

Depreciation 343 383 428 476

Tax (956) (1309) (1577) (1935)

Changes in WC 734 (282) 15 8

Others (705) (1092) (1265) (1464)

CF from Operations 5340 4247 5484 6761

Capex (1098) (500) (844) (887)

Investments (18111) (1000) (1000) (1000)

Others 16871 1139 1313 1512

CF from Investing (2337) (361) (531) (375)

Change in Debt 19 0 0 0

Interest Paid (52) (51) (51) (51)

Dividends & Others (2120) (2523) (3038) (3729)

CF from Financing (2154) (2575) (3090) (3780)

Change in Cash 814 1311 1863 2605

Source: Company, Karvy Research, * Before Exceptional Item

Company Financial Snapshot (Y/E Mar)

Profit & Loss (Rs. Mn)


Net sales 22172 25334 29473 34504

Optg. Exp (Adj for OI) 16772 19550 22480 25870

EBITDA 5401 5784 6992 8634

Depreciation 343 383 428 476

Interest 51 51 51 51

Other Income 918 1197 1371 1570

PBT 5924 6547 7884 9676

Tax 1070 1309 1577 1935

Adj. PAT 4856 5240 6309 7743

Profit & Loss Ratios

EBITDA margin (%) 24.4 22.8 23.7 25.0

Net margin (%) 21.9 20.7 21.4 22.4

P/E (x) 46.8 40.4 36.2 29.5EV/EBITDA (x) 41.5 35.7 31.7 25.4

Dividend yield (%) 0.8 1.0 1.1 1.4


Promoters72.7%

FIIs16.3% DIIs

1.2%

Others9.8%

Domestic85.7%

International

14.3%



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Apr 30, 2016

Emami Ltd

High Margin Products in the Portfolio are expected to drive EBITDA growth ahead of Sales growth:

Marching ahead in the league of Herbal Products:Zandu accounts for ~25% of the total revenue of Emami, with over 200 products in the portfolio under the Zandu Brand. The

company is also expected to extend the brand with couple of new products; with the most recent launch of Zandu Honey,

Emami is currently test marketing these new products and it is expected to launch these products by the end of FY17E. The

company has also launched new products in diabetes space, heart care and also related to stress. These products are under

test marketing in South India. The company foresees huge potential in this segment as there is no organized market and can

create market for these brands.

Balms and pain relief segment:Pain relief is a segment of focus for Emami. The company owns home-grown brands like Mentho Plus Balm, Fast Relief and

category leader Zandu Balm. The pain relief category accounted for 21% of Emami’s consolidated sales in FY15. Ayurvedic

positioning and widening rural presence made it possible for these brands to capture the largest market share in these categories.

Market Leader of Cooling Hair oil is beating the Heat:The best seller of all times, Emami’s Navratna cooling oil enjoys around 60% of the total market share. The rising temperature

across India is expected to give robust growth to its Navratna cooling oil, Navratna Cool Talc and to Boroplus prickly heatpowder. Historically, cooling oil has recorded 16% to 17% growth during moderate summer, so considering the current weather

condition, it is expected to grow at good pace.

Hair oils:Emami plugged a gap in its portfolio through the introduction of Emami 7 Oils in One, a unique oil formula combining seven

Ayurvedic ingredients which are eective for strong and healthy hair growth targeting young girls and women.

Cool oil:Emami catalysed the cool oil category in India through Navratna Oil, enjoying ~60% market share by volume and 65.5% share

by value. The company is an undisputed leader in the cooling oil category.

Exhibit 4: Revenue & EBITDA Growth (%)


Exhibit 6: Penetration Level (%)


Exhibit 5: Key Brands & Presence


Recent acquisition of Kesh King Brand, accounts for around

75% gross margin and 45% EBITDA margin as compared

to the other products in the portfolio. Kesh King Brand is

expected to drive the top line growth by around 8% to 10%additionally. This will enable Emami to record higher margins

in FY17E and FY18E. Emami has also launched new Stock

Keeping Units (SKUs) to increase the rural penetration

targeting middle age women.

It is observed that Emami enjoys market leadership position across all the brands. The fastest growing category amongst all is

the Navratna Brand growing at 17% CAGR in last 5 years. However, Navratna has very low penetration across India. The major

market for Navratna cooling oil is North India. With low penetration of Navratna and being the market leader, it is expected to

grow at high pace.

16.6% 16.9%

7.2%

21.8%

14.3%

16.3% 17.1%

12.2% 12.7%

11.8%

7.5% 7.1%

20.9% 23.5%

0%

5%

10%

15%

20%

25%

F Y12 F Y13 FY14 FY15 F Y16E F Y17E F Y18E

Revenue Growth (%) EBITDA Growth (%)

7 5 2 0

4 3 9 0

7 3 7 0

3 8 0 0

17.0% 11.0% 13.0% 15.0%

60.5%

77.7%

56.2%62.6%

0%

20%

40%

60%

80%

0

2000

4000

6000

8000

N avratna Boroplus Zandu Fair &Handsome

Market Size (Rs. Mn) CAGR (5yrs) (RHS) Market Share (%) (RHS)

17.0%

26.0%32.0%

70.0%

0%

20%

40%

60%

80%

Navratna Boroplus Zandu Fair &Handsome

Penetration (%)



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Apr 30, 2016

Emami Ltd

Skin care:

Skin care accounted for around 30% of Emami’s revenues and a higher share of prots. Emami is the leader in the antiseptic

cream category and in the men’s fairness cream segment which it pioneered. Its Navratna Cool Talc (niche cooling positioning)

has substantially increased market share in the cool talc category.

Strong Balance Sheet:

With very moderate level of capital expenditure required in the business, Emami has very strong balance sheet, earning an

average RoE of 42.9% & RoCE of 40.7% in last 4 years. Emami enjoys negative working capital for FY15 and expects to maintain

at same level, which is healthy sign for any business. Its average net debt to equity is -0.3x for last 4 years on consolidated basis.

Summary:

Emami has been an interesting growth story in the Indian FMCG sector with a net prot CAGR of more than 20% in the last

ve years. We expect that Emami is better positioned for faster growth; driven by (1) its entry into new categories, (2) scale up

of the Zandu Health Care Division (HCD) and (3) growth in international business. Emami looks well placed with strategy of

innovation and creation of strong portfolio of niche products, many of which are based on traditional ayurvedic formulations.

Most of these products have high gross margins - highest among domestic peers, along with the low penetration of most of its

categories, gives the opportunity for strong growth in the years ahead. We expect Emami’s top line to grow at 17% CAGR over

FY17E-FY18E assisted along with new launches like ‘She’ feminine hygiene, ‘HE’ deodorants, etc. to contribute to additional

revenue growth.

Exhibit 7: International Market Share (%)


Exhibit 8: Geography-wise Revenue Segmentation - Q3FY16 (%)


Exhibit 9: International Revenue Segmentation (%)

Source: Company, Karvy Research, MENAP: Middle East, North Africa & Pakistan

SAARC & SEA: South Asian Association for Regional Cooperation & South East Asia

CISEE: Commonwealth of Independent States & Eastern Europe

International Business:

The international business of Emami contributes around 17%

of the total revenue; the international business has recorded

16% CAGR from FY11 to FY15, during Q3FY16 international

business grew by 11% and by 14% in 9MFY16. Emami

also enjoys leadership position in international markets; the

Navratna cooling oil and Fair & Handsome dominate the

markets across UAE, Saudi Arabia and Bangladesh. The

company expects robust growth in top line from international

business going forward.

93.0%

45.0%

91.0%

37.0%

47.0%

30.0%

0%

20%

40%

60%

80%

100%

Navratna Fair & Handsome

UAE Saudi Arabia Bangladesh

Domestic83.0% International

17.0%

SAARC &SEA

44.0%

MENAP35.0%

CISEE12.0%

Others9.0%



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Apr 30, 2016

Emami Ltd

Exhibit 10: Business Assumptions

Y/E Mar (Rs. Mn) FY15 FY16E FY17E FY18E Comments

Revenue 22172 25334 29473 34504

We expect that Emami is better positioned for faster growth;

driven by (1) its entry into new categories, (2) scale up of

the Zandu Health Care Division (HCD) and (3) growth in

international business, along with the low penetration of mostof its categories, give the opportunity for strong growth in the

years ahead. We expect Emami’s top line to grow at 17%

CAGR over FY17E-FY18E assisted along with new launches

like ‘She’ feminine hygiene, ‘HE’ deodorants, etc. to contribute

to additional revenue growth.

Revenue Growth (%) 21.8 14.3 16.3 17.1

EBITDA 5401 5784 6992 8634

Most of the products of Emami have high gross margins -

highest among domestic peers, the recent acquisition of Kesh

King, which has around 75% gross margin, is expected to

drive the EBITDA growth ahead of Sales growth.

EBITDA Margins (%) 24.4 22.8 23.7 25.0

PAT (normalized) 4856 5240 6309 7743

Emami has been an interesting growth story in the Indian

FMCG sector with a net prot CAGR of more than 20% in

the last ve years. With high gross margin products in the

portfolio and better product mix, Emami has earned more

than 20% PAT and it is expected to grow at ~22% CAGR from

FY17E-FY18E.

Fully Diluted EPS (Rs.) 21.4 23.1 27.8 34.1

Emami’s EPS has registered CAGR of 9.1% from FY11 to

FY15 and it is expected to register double digit growth during

FY17E and FY18E. Emami has very strong balance sheet,

earning an average RoE of 42.9% & RoCE of 40.7% in last

4 years, it is expected to maintain its RoE and RoCE at samelevel going forward.

Fully Diluted EPS Growth (%) 20.7 7.9 20.4 22.7

Capex (ex. Acquisition) - cash capex (1098) (500) (844) (887)

Net CFO 5340 4247 5484 6761

Net Debt (3347) (4852) (6716) (9321)

Free Cash Flow 4243 3747 4640 5874


Exhibit 11: Karvy vs Consensus

Karvy Consensus Divergence (%) CommentsRevenues (Rs. Mn)

FY16E 25334 26476 (4.3) We have moderate outlook on volume and realizations growth.

Revenue is expected to grow at CAGR of 16.7% during

FY16E-18E.FY17E 29473 31691 (7.0)

PAT (Rs. Mn)

FY16E 5240 4905 6.8With a net prot CAGR of more than 20% in the last ve years

and with high gross margin products in the portfolio and better

product mix, Emami has earned more than 20% PAT and it is

expected to grow at ~22% CAGR from FY17E-FY18E.FY17E 6309 5979 5.5

EPS (Rs.)

FY16E 23.1 21.7 6.2 Emami’s EPS has registered CAGR of 9.1% from FY11-FY15

and it is expected to register double digit growth during FY17E

and FY18E.FY17E 27.8 26.8 3.8

Source: Bloomberg, Karvy Research



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Apr 30, 2016

Emami Ltd

Exhibit 12: Revenue (Rs. Mn), Revenue Growth (%)


Exhibit 15: PAT (Rs. Mn), PAT Margin (%)


Exhibit 13: EBITDA (Rs. Mn), EBITDA Margin (%)


Exhibit 14: EBIT (Rs. Mn), EBIT Margin (%)


Exhibit 16: EPS (Rs.), RoE & RoCE (%)


We expect that Emami is better positioned for faster growth driven by

(1) its entry into new categories, (2) scale up of the Zandu Health Care

Division (HCD) and (3) growth in international business, along with the low

penetration of most of its categories, give the opportunity for strong growth

in the years ahead. We expect Emami’s top line to grow at 17% CAGR

over FY17E-FY18E assisted along with new launches like ‘She’ feminine

hygiene, ‘HE’ deodorants, etc. to contribute to additional revenue growth.

Emami has been an interesting growth story in the Indian FMCG sector

with a net prot CAGR of more than 20% in the last ve years. With high

gross margin products in the portfolio and better product mix, Emami has

earned PAT margin more than 20% and it is expected to grow at ~22%

CAGR from FY17E to FY18E.

Most of the products of Emami have high gross margins - highest among domestic peers, the recent acquisition of Kesh King,

which has around 75% gross margin, is expected to drive the EBITDA growth ahead of sales growth.

Emami’s EPS has registered CAGR of 9.1% from FY11 to FY15 and it is

expected to register double digit growth during FY17E and FY18E. Emami

has very strong balance sheet, earning an average RoE of 42.9% & RoCE

of 40.7% in last 4 years, it is expected to maintain its RoE and RoCE at

same level going forward.

1 6 9 9 1

1 8 2 0 8

2 2 1 7

2

2 5 3 3

4

2 9 4 7

3

3 4 5 0

4

16.9%

7.2%

21.8%14.3%

16.3%17.1%

0%

10%

20%

30%

5000

15000

25000

35000

F Y 1 3

F Y 1 4

F Y 1 5

F Y 1 6 E

F Y 1 7 E

F Y 1 8 E

Revenue (Rs. Mn) YoY Growth (%)

4 4 9 4

5 0 2 3

5 4 0 1

5 7 8 4

6 9 9 2

8 6 3 4

26.4%

27.6%

24.4%

22.8%

23.7%

25.0%

20%

22%

24%

26%

28%

30%

0

2000

4000

6000

8000

10000

FY13 FY14 FY15 FY16E FY17E FY18E

EBITDA (Rs. Mn) EBITDA Margin (%)

3 7 5 3

4 7 1 4

5 9 7 6

6 5 9 9

7 9 3 5

9 7 2 8

22.1% 25.9%

27.0%26.0%

26.9%

28.2%

20%

25%

30%

35%

0

3000

6000

9000

12000


EBIT (Rs. Mn) EBIT Margin (%)

3 1 4 7

4 0 2 5

4 8 5 6

5 2 4 0

6 3 0 9 7

7 4 3

18.5%

22.1% 21.9%20.7%

21.4%22.4%

15%

18%

20%

23%

25%

0

3000

6000

9000

F Y 1 3

F Y 1 4

F Y 1 5

F Y 1 6 E

F Y 1 7 E

F Y 1 8 E

PAT (Rs . Mn) PAT Margin (%)

2

0 . 8

1 7

. 7

2

1 . 4

2 3 . 1

2 7 . 8

3 4

. 1

42.4%

47.1% 44.9%

38.3% 37.9% 38.1%39.5%

45.6%43.1%

37.0% 36.7% 37.1%

25%

30%

35%

40%

45%

50%

0

10

20

30

40


EPS (Rs.) (LHS) RoE (%)

RoCE (%)



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Apr 30, 2016

Emami Ltd

Exhibit 17: Company Snapshot (Ratings)

Low High

1 2 3 4 5

Quality of Earnings 3

Domestic Sales 3

Exports 3 Net Debt/Equity 3

Working Capital Requirement 3

Quality of Management 3

Depth of Management 3

Promoter 3

Corporate Governance 3 Source: Company, Karvy Research



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Apr 30, 2016

Emami Ltd

Valuation & Outlook

At CMP of Rs.1007, the stock is trading at P/E of 29.5x for FY18E. With the anticipated increase in top line due to high margin

products in the portfolio, rising temperature across India, strong brand positioning, innovation and new product launches which

were favourably received by the market, with strong balance sheet & nancial ratios, we expect that the consumer expenditure

will further increase as the economy revives and hence there will be growth in Emami’s top line and bottom line as well. Based

on P/E of 38.5x, we initiate the coverage with a “BUY” rating for a Target Price of Rs.1313 representing an upside of 30% for a

period of 12-15 months.

Exhibit 18: PE Band


Exhibit 19 (a): Comparative Valuation Summary

CMP (Rs.)Mcap

(Rs. Mn)

EV/EBITDA (x) P/E (x) EPS (Rs.)

FY15 FY16E FY17E FY15 FY16E FY17E FY15 FY16E FY17E

Emami Ltd 1007 228500 41.5 35.7 31.7 46.8 40.4 36.2 21.4 23.1 27.8

GCPL 1381 470209 26.9 33.3 28.3 39.1 41.6 34.4 26.6 33.2 39.6

Marico Ltd 254 32853 28.1 30.1 25.9 46.4 30.2 25.3 4.5 5.8 6.8


Exhibit 19 (b): Comparative Operational Metrics Summary

CAGR % (FY15-17E) RoE (%) Price Perf (%) Net Sales (Rs. Mn)

Sales EBITDA EPS FY15 FY16E FY17E 3m 6m 12m FY15 FY16E FY17E

Emami Ltd 15.3 13.8 14.0 44.9 38.3 37.9 (0.1) (4.0) 7.4 22172 25334 29473

GCPL 12.7 18.5 22.0 22.1 24.1 24.1 7.9 2.2 22.3 82422 90408 104638

Marico Ltd 10.3 18.6 22.2 36.1 35.1 34.1 16.9 32.2 29.6 57203 61879 69564


40

50

60

70

Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16

P/E Average 1SD 2SD -1SD -2SD



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Apr 30, 2016

Emami Ltd

Key Risks

y Competition.

y Volatility in raw material prices.

Peer Comparison

Exhibit 20: Revenue Growth (%)


Exhibit 22: RoE (%)


Exhibit 21: EBITDA Margin (%)


Exhibit 23: Dividend Payout Ratio (%)


7.2%

21.8%

14.3% 16.3%

0%

5%

10%

15%

20%

25%

FY14 FY15 FY16E FY17E

Emami GCPL Marico

27.6%

24.4%22.8% 23.7%

10%

15%

20%

25%

30%


Emami GCPL Marico

47.1%44.9%

38.3%37.9%

20%

30%

40%

50%


Emami GCPL Marico

27.0%

54.4%

45.0%

46.2% 38.7%

10%

20%

30%

40%

50%

60%

FY11 FY12 FY13 FY14 FY15

Emami GCPL Marico



10/1210

Apr 30, 2016

Emami Ltd

Financials

Exhibit 24: Income Statement


Revenues 18208 22172 25334 29473 34504

Growth (%) 7.2 21.8 14.3 16.3 17.1

Operating Expenses 13185 16772 19550 22480 25870

EBITDA 5023 5401 5784 6992 8634

Growth (%) 11.8 7.5 7.1 20.9 23.5

Depreciation & Amortization 961 343 383 428 476

Other Income 653 918 1197 1371 1570

EBIT 4714 5976 6599 7935 9728

Interest Expenses 54 51 51 51 51PBT 4571 5924 6547 7884 9676

Tax 547 1070 1309 1577 1935

Adjusted PAT 4025 4856 5240 6309 7743

Growth (%) 27.9 20.7 7.9 20.4 22.7


Exhibit 25: Balance Sheet


Cash & Cash Equivalents 2700 3541 5046 6910 9515

Trade Receivables 793 1027 1057 1232 1443

Inventories 1411 1267 1589 1867 2198

Loans & Advances & Others 1149 1206 1716 1963 2298

Investments 2892 4946 5946 6946 7946

Net Block 4078 4776 4917 5359 5797

Total Assets 13023 16763 20273 24278 29197

Current Liabilities & Provisions 3146 3688 4451 5147 6002

Debt 218 194 194 194 194

Other Liabilities 338 574 605 645 694

Total Liabilities 3702 4457 5250 5985 6890

Shareholders Equity 227 227 227 227 227

Reserves & Surplus 9094 12079 14796 18066 22080

Total Networth 9321 12306 15023 18293 22307

Total Networth & Liabilities 13023 16763 20273 24278 29197




11/1211

Apr 30, 2016

Emami Ltd

Exhibit 26: Cash Flow Statement


PBT (Before Exceptional Item) 4660 5924 6547 7884 9676

Depreciation 352 343 383 428 476

Tax Paid (766) (956) (1309) (1577) (1935)

Inc/dec in Net WC 596 734 (282) 15 8

Other Income (586) (1491) (1093) (1267) (1466)

Other non cash items 69 786 2 2 2

Cash ow from operating activities 4325 5340 4247 5484 6761

Inc/dec in capital expenditure (654) (1098) (500) (844) (887)

Inc/dec in investments (13052) (18111) (1000) (1000) (1000)

Others 12287 16871 1139 1313 1512

Cash ow from investing activities (1419) (2337) (361) (531) (375)

Changes in Debt (751) 19 0 0 0

Dividend paid (2211) (2120) (2523) (3038) (3729)

Interest paid (51) (52) (51) (51) (51)

Eect of Forex Fluctuation 21 (35) 0 0 0

Cash ow from nancing activities (3013) (2154) (2575) (3090) (3780)

Net change in cash (128) 814 1311 1863 2605


Exhibit 27: Key Ratios

YE Mar FY14 FY15 FY16E FY17E FY18E

EBITDA Margin (%) 27.6 24.4 22.8 23.7 25.0

EBIT Margin (%) 25.9 27.0 26.0 26.9 28.2

Net Prot Margin (%) 22.1 21.9 20.7 21.4 22.4

Dividend Payout Ratio (%) 46.2 38.7 40.0 40.0 40.0

Net Debt/Equity (x) (0.3) (0.3) (0.3) (0.4) (0.4)

RoE (%) 47.1 44.9 38.3 37.9 38.1

RoCE (%) 45.6 43.1 37.0 36.7 37.1


Exhibit 28: Valuation Parameters

YE Mar FY14 FY15 FY16E FY17E FY18E

EPS (Rs.) 17.7 21.4 23.1 27.8 34.1

DPS (Rs.) 8.2 8.3 9.2 11.1 13.6

BV (Rs.) 41.1 54.2 66.2 80.6 98.3

PE (x) 24.5 46.8 40.4 36.2 29.5

P/BV (x) 10.6 18.5 14.1 12.5 10.2

EV/EBITDA (x) 19.2 41.5 35.7 31.7 25.4

EV/Sales (x) 5.3 10.1 8.2 7.5 6.4

Source: Company, Karvy Research; *Represents multiples for FY14 & FY15 are based on historic market price



12/12

Apr 30, 2016

Emami Ltd

Stock Ratings Absolute Returns

Buy : > 15%

Hold : 5-15%

Sell :

karvy on emami ltd

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