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

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.

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