Shares of Emami Ltd zoomed as much as 18 per cent to Rs 304.30 apiece on the BSE on Monday against Friday's close of Rs 257.65. The company on Friday reported a 13.64 per cent year-on-year (YoY) drop in profit before tax to Rs 49.06 crore for the June quarter (Q1FY21) while net profit or profit after tax (PAT), was up 1.1 per cent to Rs 39.58 crore.
At 10:58 AM, the stock was trading over 16 per cent higher at Rs 299 on the BSE. It had hit a 52-week high of Rs 357 on January 17, 2020 while its 52-week low level stands at Rs 140.85, touched on March 30, 2020.
For the quarter under review, revenues from operations were down by 25.79 per cent to Rs 481.34 crore as offtakes of summer portfolio were impacted due to the lockdown and weak environment for discretionary products. The health and hygiene portfolio range, however, grew 29 per cent.
Gross margins during the quarter increased by 230 basis points at 66.5 per cent and earnings before interest, taxes, depreciation and amortisation (EBIDTA) margins by 490 basis points at 25.5 per cent.
The company further said it made 12 new launches during the quarter, which contributed 5 per cent of the domestic sales. Additionally, it completed the buyback of shares worth Rs 192 crore.
"Emami posted a resilient performance with improved margins in Q1FY21, defying the challenging times that the Covid-19 pandemic presented. Notwithstanding the severe impact of the unprecedented nation-wide lockdown on the offtakes in April, which led to disruptions in the supply chain, sales improved considerably in May and in June and revenues were even better with a high single-digit growth over the previous year," the company said in its press release.
Analysts at Prabhudas Lilladher note that Emami 1Q results were better due to 29 per cent growth in Zandu and Boroplus even as rest of the portfolio was under pressure and declined 44 per cent.
"Sales are bouncing back with double-digit growth in July and outlook is improving led by strong demand for Immunity boosters, revival in Kesh King and Pain Management. Emami will also gain from a low base in 2H21 and benign input costs. Although we would watch out for success of planned launches, we model 8.8 per cent growth in sales and 11 per cent in EBIDTA and 17.2 per cent in PAT over FY20-23," the brokerage said in a result review report issued on August 7.
It has upgraded the stock to "BUY" with the target price of Rs 419.