The first quarter of the current fiscal year saw Emami’s spending on advertisements and sales promotion soaring up by 11.42% on a YoY basis. This time around, the FMCG player’s ad spends stood at Rs 15,187 lakh as against Rs 13,630 lakh it had spent in Q1FY23.
With this, the FMCG major also recorded its Profit After Tax spurting by 88.13% on a YoY basis as it amassed Rs 13,675 lakh. It amassed Rs 7,269 lakh in the corresponding quarter of the previous fiscal.
The FMCG major’s total income stood at Rs 83,394 lakh in the first quarter that ended June 30, 2023, which is 6.96% higher than the previous year’s corresponding quarter where the company generated an income of Rs 77964 lakh.
On the other hand, the company’s expenses were also up 5.94% on a QoQ basis.
In Q1 of the current fiscal, Emami spent a total of Rs 63,565 lakh on the Cost of materials consumed; Purchase of Stock-in-trade; Increase/Decrease in Inventories of Finished Goods, Stock in trade and Work-in-Progress; Employee Benefits Expense and Advertisement and Sales Promotion amongst others.
It had incurred an expense of Rs 59,999 lakh in the corresponding period of the previous fiscal.
While inflation moderated and demand showed some sequential improvement during the third quarter, mass consumers most susceptible to price increases have not yet recovered to pre-inflation levels and what has impacted the sales of summer products is the unseasonal rainfall across the country, the FMCG player stated in its quarterly filing.
“Excluding the sales of the summer portfolio, Domestic business grew strongly by 16%, while the overall growth of Domestic Business in Q1FY24 stood at 7%. Pain Management range, Healthcare range and BoroPlus grew strongly in double digits and Dermicool posted high single-digit growth. Kesh King and Male grooming range being discretionary in nature posted muted growth during the quarter. However, the summer portfolio declined by 5% during the quarter due to the impact of unseasonal rains,” the company said.
Harsha V Agarwal, Vice Chairman and Managing Director, Emami, also said, “We are happy to report a 7% growth in domestic business despite a challenging operating environment. While erratic summer and unseasonal rains impacted summer product offtakes, our non-summer portfolio grew strongly by 16%. International business also continued its growth trajectory with 11% constant currency growth. With inflation moderating further, we look to the future with increased optimism and confidence.”
“With the development of digital eco-system, both e-commerce and D2C will play a key role in the organisation’s growth and we will continue to invest in strengthening our presence in an omni-channel presence to reach our consumers,” he said.
Furthermore, the company in its filing also mentioned that Modern Trade and eCommerce continued to perform well growing by 45% and 47%, respectively, over previous year, and contributed 9.7% each to Domestic business.
As per Mohan Goenka, Vice Chairman and Whole-Time Director, Emami, the quarter witnessed strong performance by the company’s Pain Management, BoroPlus and Healthcare range which grew in double digits, with Dermicool posting a high single digit growth.
“Backed by our resilient and competitive performance and aided by softening of input cost, we could deliver healthy expansion of gross margin and EBIDTA and a robust profit growth of 87%. We endeavour to strengthen our core and continue to invest in growth drivers to deliver healthy profitability this year,” he added.
In addition to this, Emami’s Revenue from Operations was also marginally up by 1.2% and stood at Rs 98,272 lakh in Q3 of FY23, juxtaposed to Rs 97,106 lakh it generated in the corresponding quarter, last year.
As per Emami, the domestic business of the company grew by 1% during the quarter translating into a 3-year CAGR of 6% as despite rural markets remaining muted, urban-centric new age channels like Modern Trade continued to grow strongly by 20% and e-commerce by 45% during the quarter.
“Both modern trade and e-commerce, put together, now contribute to 18.4% of domestic revenues against 13.8% in Q3 last year,” it mentioned.