Stock market today: S&P 500 drops for fifth day as focus shifts to Powell’s speech
On Wednesday, Citi analysts revised the price target for Emami (NSE:EMAM) Ltd (HMN:IN), a leading Indian FMCG company, to INR750.00 from the previous target of INR920.00. Despite this reduction, they have upheld their Buy rating on the stock. This adjustment follows Emami’s third-quarter results, which displayed a 5% increase in consolidated revenue, propelled by a 4% rise in domestic volume growth.
The company’s performance was influenced by a combination of factors. While rural market growth accelerated, this was somewhat counterbalanced by stagnant urban demand and a delay in the winter season’s onset. Nevertheless, Emami’s winter product line showed robust results, with BoroPlus cream achieving a 20% surge and the healthcare range experiencing a 13% year-over-year growth. Notably, the company continued to witness double-digit growth into January 2025.
Citi highlighted areas of concern in Emami’s portfolio, including the Kesh King brand, which may need a strategic overhaul, and Fair & Handsome, which is currently undergoing a rebranding to Smart & Handsome. The Man Company and international segments also face challenges due to the tough market environment.
Despite these issues, Citi remains confident about Emami’s medium-term growth prospects. The firm’s optimism is rooted in Emami’s strategic initiatives focused on distribution expansion and innovation. The analysts expect the business to be relatively insulated from the downturn in urban consumption, primarily because of Emami’s significant rural market presence, which accounts for 53% of its business, and its strong organized channel distribution, making up 29%.
In their commentary, Citi analysts stated, "We remain positive on Emami’s medium-term growth potential driven by strategic initiatives around distribution, innovation et al. We expect the business to be relatively less impacted by the weakness in urban consumption, largely due to the higher salience of rural (53%) and organized channels (29%). Maintain Buy." This sentiment underscores their belief that Emami’s strategic direction will support continued growth despite some portfolio weaknesses and broader market challenges.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.