Emami hits over three-year low; stock falls 11%

Emami
Shares of personal products company Emami hit an over three-year low of Rs 402, down 11% on the BSE on back of heavy volumes.

The stock was trading at its lowest level since January 1, 2015, down 19% in the past four trading days. The trading volumes on the counter more than doubled with a combined 588,882 equity shares changed hands on the BSE and NSE so far. At 10:44 am; Emami was trading 9.5% lower at Rs 411 against 0.26% decline in the S&P BSE Sensex.

Since August 2018, the stock underperforming the market by falling 32% as the company’s April-June quarter (Q1FY19) results missed analyst expectations. The company reported 14% year on year (YoY) in revenue to a little over Rs 6.1 billion, lower than the consensus estimate of Rs 6.3 billion. Overall volume growth at 16% was less than analyst expectations of more than 20%, given the low base of the year-before quarter.

The brokerage firm Prabhudas Lilladher expects Emami to report 3.2% decline in net profit and 4.5% rise in sales for the quarter ended September 2018 (Q2FY19) over the previous year quarter.

“We estimate 3% volume growth on high base and muted season. Kesh King recovery is on track post successful re-launch in 2Q. Watch out for price increases as input costs inflation in LLP, mentha oil and packaging continue. Mentha prices has seen a sharp increase of 55% from the bottom and would impact raw material costs of Emami,” the brokerage firm said in quarterly preview.


Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel