Apr 30, 2016

Consumer Staples-Household Products Emami Ltd

Emami Ltd
Bloomberg Code: HMN IN

India Research - Stock Broking

BUY
Recommendation (Rs.)
Market Leader of Cooling Hair Oil, Beating the Heat
CMP (as on Apr 29, 2016) 1007
High Margin Products in the Portfolio are expected to drive EBITDA growth Target Price 1313
ahead of Sales growth: Recent acquisition of Kesh King Brand, accounts for Upside (%) 30
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 Stock Information
by around 8% to 10% additionally. This will enable Emami to record higher margins Mkt Cap (Rs.mn/US$ mn) 228500 / 3440
in FY17E and FY18E. 52-wk High/Low (Rs.) 1368 / 870
3M Avg. daily volume (mn) 0.2
Marching ahead in the league of Herbal Products: Zandu accounts for ~25%
Beta (x) 0.7
of the total revenue of Emami, with over 200 products in the portfolio under the
Sensex/Nifty 25607 / 7850
Zandu Brand. The company is also expected to extend the brand with couple of
O/S Shares(mn) 227.0
new products; with the most recent launch of Zandu Honey, Emami is currently test
Face Value (Rs.) 1.0
marketing these new products and it is expected to launch these products by the
end of FY17E. Shareholding Pattern (%)
Promoters 72.7
Market Leader of Cooling Hair oil is beating the Heat: The best seller of
FIIs 16.3
all times, Emamis Navratna cooling oil enjoys around 60% of the total market
DIIs 1.2
share. The rising temperature across India is expected to give robust growth to
Others 9.8
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, Stock Performance (%)
so considering the current weather condition it is expected to grow at good pace. 1M 3M 6M 12M
Absolute 10 (0) (4) 7
Valuation and Outlook Relative to Sensex 7 (3) 1 14
At CMP of Rs.1007, the stock is trading at P/E of 29.5x for FY18E. With the Source: Bloomberg

anticipated increase in top line due to high margin products in the portfolio, rising
temperature across India, strong brand positioning, innovation and new product Relative Performance*
launches which were favourably received by the market, with strong balance sheet 150

& financial ratios, we expect that the consumer expenditure will further increase as 130

the economy revives and hence there will be growth in Emamis top line and bottom 110
line as well. Based on P/E of 38.5x, we initiate the coverage with a BUY rating 90
for a Target Price of Rs.1313 representing an upside of 30% for a period of 12-15
70
months. Mar-16
Jul-15
Aug-15

Nov-15
Dec-15
Apr-15

Oct-15

Apr-16
Jun-15

Jan-16
May-15

Feb-16
Sep-15

Key Risks Emami Sensex

yyCompetition. Source: Bloomberg; *Index 100
yyVolatility in raw material prices.
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 Profit 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 38.1
P/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
Analyst Contact
Kunal Jagda
For private circulation only. For important information about Karvys rating system and other disclosures refer
to the end of this material. Karvy Stock Broking Research is also available on Bloomberg, KRVY<GO>, 040 - 3321 6277
Thomson Publishers & Reuters kunalnarendra.jagda@karvy.com

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 Apr 30, 2016
Emami Ltd

Company Financial Snapshot (Y/E Mar) Company Background

Profit & Loss (Rs. Mn) Emami Group established in early 1970s, has grown in India,
FY15 FY16E FY17E FY18E with its presence in major sectors like FMCG, Real Estate,
Net sales 22172 25334 29473 34504 Hospitals, Retail, Newsprint Manufacturing, Pharmacy chain,
Contemporary art, Edible oil and biodiesel. Founded by two
Optg. Exp (Adj for OI) 16772 19550 22480 25870
friends Mr. R.S. Agarwal and Mr. R.S. Goenka, today Emami
EBITDA 5401 5784 6992 8634
is a trusted brand of the nation with over 25,000 employees
Depreciation 343 383 428 476
and with a group turnover of about Rs.100 Bn. Emami Ltd is
Interest 51 51 51 51 one of the leading and fastest growing personal and healthcare
Other Income 918 1197 1371 1570 businesses in India, with an enviable portfolio of household
PBT 5924 6547 7884 9676 brand names such as Boroplus, Navratna, Fair and Handsome,
Tax 1070 1309 1577 1935 Zandu balm, Mentho Plus balm and Fast Relief. With seven
Adj. PAT 4856 5240 6309 7743 manufacturing locations in India and one in Bangladesh
Profit & Loss Ratios supported by a widespread distribution network, the company
is positioned to make its products available in every corner of
EBITDA margin (%) 24.4 22.8 23.7 25.0
the country. Emami has received countless accolades for its
Net margin (%) 21.9 20.7 21.4 22.4
innovative and clutter-breaking products, which have carved
P/E (x) 46.8 40.4 36.2 29.5
out whole new segments from scratch in the Indian FMCG
EV/EBITDA (x) 41.5 35.7 31.7 25.4 space and positioned the company as one of the fastest
Dividend yield (%) 0.8 1.0 1.1 1.4 growing and most profitable companies in the sector.
Source: Company, Karvy Research

Balance sheet (Rs. Mn) Cash Flow (Rs. Mn)

FY15 FY16E FY17E FY18E FY15 FY16E FY17E FY18E
Total Assets 16763 20273 24278 29197 PBT* 5924 6547 7884 9676
Net Fixed assets 4776 4917 5359 5797 Depreciation 343 383 428 476
Current assets 5834 7693 10009 13155 Tax (956) (1309) (1577) (1935)
Other assets 6153 7663 8910 10245 Changes in WC 734 (282) 15 8
Total Liabilities 16763 20273 24278 29197 Others (705) (1092) (1265) (1464)
Networth 12306 15023 18293 22307 CF from Operations 5340 4247 5484 6761
Debt 194 194 194 194 Capex (1098) (500) (844) (887)
Current Liabilities 3688 4451 5147 6002 Investments (18111) (1000) (1000) (1000)
Other Liabilities 574 605 645 694 Others 16871 1139 1313 1512
CF from Investing (2337) (361) (531) (375)
Balance Sheet Ratios Change in Debt 19 0 0 0
RoE (%) 44.9 38.3 37.9 38.1 Interest Paid (52) (51) (51) (51)
RoCE (%) 43.1 37.0 36.7 37.1 Dividends & Others (2120) (2523) (3038) (3729)
Net Debt/Equity (x) (0.3) (0.3) (0.4) (0.4) CF from Financing (2154) (2575) (3090) (3780)
Equity/Total Assets (%) 73.4 74.1 75.3 76.4 Change in Cash 814 1311 1863 2605
P/BV (x) 18.5 14.1 12.5 10.2
Source: Company, Karvy Research Source: Company, Karvy Research, * Before Exceptional Item

Exhibit 2: Shareholding Pattern (%) Exhibit 3: Geography-wise Revenue Segmentation - FY15 (%)

FIIs Domestic
16.3% 85.7%
DIIs
Promoters 1.2%
72.7% International
Others 14.3%
9.8%

Source: BSE, Karvy Research Source: Company, Karvy Research

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Emami Ltd

High Margin Products in the Portfolio are expected to drive EBITDA growth ahead of Sales growth:
Exhibit 4: Revenue & EBITDA Growth (%)
25% 21.8% 23.5%
20.9%
Recent acquisition of Kesh King Brand, accounts for around
20% 16.6% 16.9%
14.3% 75% gross margin and 45% EBITDA margin as compared
15% 11.8% 16.3%
17.1% to the other products in the portfolio. Kesh King Brand is
10% 12.2% 12.7% expected to drive the top line growth by around 8% to 10%
additionally. This will enable Emami to record higher margins
5% 7.2% 7.5% 7.1%
in FY17E and FY18E. Emami has also launched new Stock
0% Keeping Units (SKUs) to increase the rural penetration
FY12 FY13 FY14 FY15 FY16E FY17E FY18E targeting middle age women.
Revenue Growth (%) EBITDA Growth (%)
Source: Company, Karvy Research

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 Emamis 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, Emamis 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.

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 effective 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 5: Key Brands & Presence Exhibit 6: Penetration Level (%)
8000 60.5% 80% 80%
56.2%
62.6%
77.7%
6000 60% 60% 70.0%
7520

4000 40%
7370

40%
4390

3800

2000 20%
32.0%
17.0% 11.0% 13.0% 15.0% 20% 26.0%
0 0%
Navratna Boroplus Zandu Fair & 17.0%
Handsome 0%
Navratna Boroplus Zandu Fair &
Market Size (Rs. Mn) CAGR (5yrs) (RHS) Market Share (%) (RHS) Handsome
Penetration (%)
Source: Company, Karvy Research Source: Company, Karvy Research

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.

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 Apr 30, 2016
Emami Ltd

Skin care:
Skin care accounted for around 30% of Emamis revenues and a higher share of profits. Emami is the leader in the antiseptic
cream category and in the mens 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.

International Business:
Exhibit 7: International Market Share (%)
100% The international business of Emami contributes around 17%
93.0% 91.0% of the total revenue; the international business has recorded
80%
16% CAGR from FY11 to FY15, during Q3FY16 international
60% business grew by 11% and by 14% in 9MFY16. Emami
40% also enjoys leadership position in international markets; the
47.0% 45.0%
37.0% Navratna cooling oil and Fair & Handsome dominate the
20% 30.0%
markets across UAE, Saudi Arabia and Bangladesh. The
0% company expects robust growth in top line from international
Navratna Fair & Handsome business going forward.
UAE Saudi Arabia Bangladesh
Source: Company, Karvy Research

Exhibit 8: Geography-wise Revenue Segmentation - Q3FY16 (%) Exhibit 9: International Revenue Segmentation (%)

MENAP
35.0%

Domestic SAARC &

83.0% SEA
International 44.0%
17.0%
CISEE
12.0%

Others
9.0%

Source: Company, Karvy Research 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

Summary:
Emami has been an interesting growth story in the Indian FMCG sector with a net profit CAGR of more than 20% in the last
five 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 Emamis 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.

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Emami Ltd

Exhibit 10: Business Assumptions

Y/E Mar (Rs. Mn) FY15 FY16E FY17E FY18E Comments
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
Revenue 22172 25334 29473 34504 of its categories, give the opportunity for strong growth in the
years ahead. We expect Emamis 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
Most of the products of Emami have high gross margins -
highest among domestic peers, the recent acquisition of Kesh
EBITDA 5401 5784 6992 8634
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
Emami has been an interesting growth story in the Indian
FMCG sector with a net profit CAGR of more than 20% in
the last five years. With high gross margin products in the
PAT (normalized) 4856 5240 6309 7743
portfolio and better product mix, Emami has earned more
than 20% PAT and it is expected to grow at ~22% CAGR from
FY17E-FY18E.
Emamis 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,
Fully Diluted EPS (Rs.) 21.4 23.1 27.8 34.1
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.
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 (%) Comments
Revenues (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
FY17E 29473 31691 (7.0) FY16E-18E.
PAT (Rs. Mn)
With a net profit CAGR of more than 20% in the last five years
FY16E 5240 4905 6.8 and with high gross margin products in the portfolio and better
product mix, Emami has earned more than 20% PAT and it is
FY17E 6309 5979 5.5 expected to grow at ~22% CAGR from FY17E-FY18E.
EPS (Rs.)

FY16E 23.1 21.7 6.2 Emamis EPS has registered CAGR of 9.1% from FY11-FY15
and it is expected to register double digit growth during FY17E
FY17E 27.8 26.8 3.8 and FY18E.
Source: Bloomberg, Karvy Research

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Emami Ltd

Exhibit 12: Revenue (Rs. Mn), Revenue Growth (%)

17.1% 30%
35000
21.8% 14.3%
16.3% We expect that Emami is better positioned for faster growth driven by
16.9%
25000 20% (1) its entry into new categories, (2) scale up of the Zandu Health Care
7.2%
Division (HCD) and (3) growth in international business, along with the low
22172

25334

29473

34504
10%
15000 penetration of most of its categories, give the opportunity for strong growth
16991

18208

5000 0% in the years ahead. We expect Emamis top line to grow at 17% CAGR
over FY17E-FY18E assisted along with new launches like She feminine
FY13

FY14

FY15

FY16E

FY17E

FY18E
hygiene, HE deodorants, etc. to contribute to additional revenue growth.
Revenue (Rs. Mn) YoY Growth (%)

Source: Company, Karvy Research

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.

Exhibit 13: EBITDA (Rs. Mn), EBITDA Margin (%) Exhibit 14: EBIT (Rs. Mn), EBIT Margin (%)
12000 35%
10000 30% 28.2%
27.6%
25.0%
8000 26.4% 28% 9000
30%
6000 24.4% 26% 27.0% 26.9%
23.7% 6000 25.9% 26.0%
22.8% 22.1%
4000 24%
25%
3000
4494

5401

5784

6992

8634

5976

6599

7935

9728
2000 22%
5023

3753

0 20% 0 4714 20%

FY13 FY14 FY15 FY16E FY17E FY18E FY13 FY14 FY15 FY16E FY17E FY18E
EBITDA (Rs. Mn) EBITDA Margin (%) EBIT (Rs. Mn) EBIT Margin (%)

Source: Company, Karvy Research Source: Company, Karvy Research

Exhibit 15: PAT (Rs. Mn), PAT Margin (%)

9000 25%
22.4%
22.1% 21.9% 21.4%
20.7% 23% Emami has been an interesting growth story in the Indian FMCG sector
7743

6000
18.5% with a net profit CAGR of more than 20% in the last five years. With high
6309

20%
5240
4856

3000 gross margin products in the portfolio and better product mix, Emami has
3147

4025

18%
earned PAT margin more than 20% and it is expected to grow at ~22%
0 15%
CAGR from FY17E to FY18E.
FY13

FY14

FY15

FY16E

FY17E

FY18E

PAT (Rs. Mn) PAT Margin (%)

Source: Company, Karvy Research

Exhibit 16: EPS (Rs.), RoE & RoCE (%)

40 47.1% 44.9% 50%
42.4%
45%
30
45.6% 38.3% 37.9% 38.1% Emamis EPS has registered CAGR of 9.1% from FY11 to FY15 and it is
39.5% 43.1% 40%
20 expected to register double digit growth during FY17E and FY18E. Emami
37.1%
37.0% 36.7% 35%
has very strong balance sheet, earning an average RoE of 42.9% & RoCE
10
of 40.7% in last 4 years, it is expected to maintain its RoE and RoCE at
20.8

21.4

30%
17.7

34.1
23.1

27.8

0 25% same level going forward.

FY13 FY14 FY15 FY16E FY17E FY18E
EPS (Rs.) (LHS) RoE (%)
RoCE (%)
Source: Company, Karvy Research

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Emami Ltd

Exhibit 17: Company Snapshot (Ratings)

Low High
1 2 3 4 5
Quality of Earnings 33
Domestic Sales 33
Exports 33
Net Debt/Equity 33
Working Capital Requirement 33
Quality of Management 33
Depth of Management 33
Promoter 33
Corporate Governance 33
Source: Company, Karvy Research

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 Apr 30, 2016
Emami Ltd

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 & financial ratios, we expect that the consumer expenditure
will further increase as the economy revives and hence there will be growth in Emamis 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

70

60

50

40
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
Source: Bloomberg, Karvy Research

Exhibit 19 (a): Comparative Valuation Summary

Mcap EV/EBITDA (x) P/E (x) EPS (Rs.)
CMP (Rs.)
(Rs. Mn) 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

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Emami Ltd

Peer Comparison

Exhibit 20: Revenue Growth (%) Exhibit 21: EBITDA Margin (%)
25% 21.8% 30% 27.6%

20% 24.4%
25% 22.8% 23.7%
16.3%
14.3%
15%
20%
10% 7.2%

15%
5%

0% 10%
FY14 FY15 FY16E FY17E FY14 FY15 FY16E FY17E
Emami GCPL Marico Emami GCPL Marico
Source: Bloomberg, Karvy Research Source: Bloomberg, Karvy Research

Exhibit 22: RoE (%) Exhibit 23: Dividend Payout Ratio (%)
50% 47.1% 60%
44.9% 54.4%

50% 45.0%
38.3%
40% 37.9% 38.7%
46.2%
40%
27.0%
30%
30%
20%

20% 10%
FY14 FY15 FY16E FY17E FY11 FY12 FY13 FY14 FY15
Emami GCPL Marico Emami GCPL Marico
Source: Bloomberg, Karvy Research Source: Bloomberg, Karvy Research

Key Risks
yyCompetition.
yyVolatility in raw material prices.

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 Apr 30, 2016
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 51
PBT 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

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 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 flow 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 flow 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)
Effect of Forex Fluctuation 21 (35) 0 0 0
Cash flow from financing 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 Profit 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

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 Apr 30, 2016
Emami Ltd

Stock Ratings Absolute Returns

Buy : > 15%
Hold : 5-15%
Sell : <5%

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