karvy on emami ltd
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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
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
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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
Source: Company, Karvy Research
Cash Flow (Rs. Mn)
FY15 FY16E FY17E FY18E
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)
FY15 FY16E FY17E FY18E
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
Source: Company, Karvy Research
Promoters72.7%
FIIs16.3% DIIs
1.2%
Others9.8%
Domestic85.7%
International
14.3%
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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 (%)
Source: Company, Karvy Research
Exhibit 6: Penetration Level (%)
Source: Company, Karvy Research
Exhibit 5: Key Brands & Presence
Source: Company, Karvy Research
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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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 (%)
Source: Company, Karvy Research
Exhibit 8: Geography-wise Revenue Segmentation - Q3FY16 (%)
Source: Company, Karvy Research
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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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
Source: Company, Karvy Research
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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Exhibit 12: Revenue (Rs. Mn), Revenue Growth (%)
Source: Company, Karvy Research
Exhibit 15: PAT (Rs. Mn), PAT Margin (%)
Source: Company, Karvy Research
Exhibit 13: EBITDA (Rs. Mn), EBITDA Margin (%)
Source: Company, Karvy Research
Exhibit 14: EBIT (Rs. Mn), EBIT Margin (%)
Source: Company, Karvy Research
Exhibit 16: EPS (Rs.), RoE & RoCE (%)
Source: Company, Karvy Research
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
FY13 FY14 FY15 FY16E FY17E FY18E
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
FY13 FY14 FY15 FY16E FY17E FY18E
EPS (Rs.) (LHS) RoE (%)
RoCE (%)
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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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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
Source: Bloomberg, Karvy Research
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
Source: Bloomberg, Karvy Research
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
Source: Bloomberg, Karvy Research
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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Emami Ltd
Key Risks
y Competition.
y Volatility in raw material prices.
Peer Comparison
Exhibit 20: Revenue Growth (%)
Source: Bloomberg, Karvy Research
Exhibit 22: RoE (%)
Source: Bloomberg, Karvy Research
Exhibit 21: EBITDA Margin (%)
Source: Bloomberg, Karvy Research
Exhibit 23: Dividend Payout Ratio (%)
Source: Bloomberg, Karvy Research
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%
FY14 FY15 FY16E FY17E
Emami GCPL Marico
47.1%44.9%
38.3%37.9%
20%
30%
40%
50%
FY14 FY15 FY16E FY17E
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
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Emami Ltd
Financials
Exhibit 24: Income Statement
YE Mar (Rs. Mn) FY14 FY15 FY16E FY17E FY18E
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
Source: Company, Karvy Research
Exhibit 25: Balance Sheet
YE Mar (Rs. Mn) FY14 FY15 FY16E FY17E FY18E
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
Source: Company, Karvy Research
http://www.karvy.com/
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8/17/2019 Karvy on Emami Ltd
11/1211
Apr 30, 2016
Emami Ltd
Exhibit 26: Cash Flow Statement
YE Mar (Rs. Mn) FY14 FY15 FY16E FY17E FY18E
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
Source: Company, Karvy Research
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
Source: Company, Karvy Research
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
http://www.karvy.com/
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8/17/2019 Karvy on Emami Ltd
12/12
Apr 30, 2016
Emami Ltd
Stock Ratings Absolute Returns
Buy : > 15%
Hold : 5-15%
Sell :