Demonetisation, together with the slowdown in its international business, pulled down Kolkata-based Emami Ltd's consolidated revenue by 4.3 per cent at Rs 578 crore for the quarter ended March 31, 2017, even as it was able to hold its profit margins, which remained flat at Rs 83 crore.
During the January-March period of the 2015-16 fiscal year, Emami Ltd reported a net profit of Rs 82 crore while its total income stood at Rs. 604 crore.
"Notwithstanding cautious market sentiment post the demonetisation drive, we are happy to announce a modest quarter performance as compared to the overall muted industry environment", the company's director, Harsha V Agarwal said.
In a statement, the company said its domestic revenue was affected by the disruption in trade channels post demonetization while international revenue took a hit on account of geopolitical situation.
While the company's domestic revenue grew by three per cent at Rs. 487 crore during the Q4 period of the last fiscal year, stress in the global sales dragged down the growth to a negative 4.3 per cent.
On a yearly basis, the company reported a sluggish six per cent growth in its total income from operations at Rs. 2533 crore with an EBIDTA growth of 11 per cent at Rs. 759 crore during the 2016-17 fiscal year.
The Power Brands, which are the key revenue drivers of the company and includes names like BoroPlus, Navratna, Kesh King and others performed well during the year and new launches like Fair & Handsome Face Wash, 7 Oils in One and HE Deodorants continued to grow at a rapid pace.
As per the company, the Navratna Cool Oil, Fair & Handsome Cream and Kesh King increased their market share to 61.1 per cent, 60.3 per cent and 34 per cent respectively. In turn, Emami Ltd's gross margins at 65.5 per cent improved by 100 basis points on a year-on-year basis and EBITDA margins grew by 130 basis points at 30 per cent.
"Last quarter, liquidity crunch and sales channel disruption impacted the offtake of some of our brands in the domestic market. In face of this, we have initiated a massive distribution restructuring to reduce our dependence on the wholesale network and go for direct retail", Mohan Goenka, director at Emami Ltd said.
"This year we have been successful to garner a direct reach of 7.3 lac outlets from last year's network of 6.4 lacs outlets which we target to scale up to a coverage of 8 lacs outlets by the end of next financial year", he added.