Emami — Q1 FY26 earnings call

Call held 31 Jul 2025

Management summary

Emami Limited navigated a challenging Q1 FY26 marked by a soft summer and urban demand pressure, resulting in broadly flat revenue. Despite headwinds in summer-focused categories, core domestic business showed resilience. Strong margin expansion was achieved through product mix, and PAT grew 9%. The company is focusing on brand relaunches, innovation, and digital channels for future growth.

Highlights

  • Overall revenue remained broadly flat in a challenging demand environment.

  • Core domestic business (excluding talc and prickly heat powders) delivered 6% revenue growth and 3% volume growth.

  • Talcum powder and prickly heat powder category declined by 17% due to a soft summer season.

  • Pain management range grew robustly by 17%, and BoroPlus antiseptic creams grew by 60%.

  • Gross margins expanded by 170 basis points to 69.4%.

  • EBITDA stood at INR 214 crores, a marginal decline of 1% year-on-year.

  • Profit after tax grew by 9% to INR 164 crores.

  • International business delivered a modest 2% growth, with 13.6% growth excluding Bangladesh.

Concerns

  • Unseasonal weather impacting summer-focused portfolio

Key financials

  1. Revenue Growth 0% 0%YoY
  2. Gross Margin 69.4%
  3. EBITDA ₹214 Cr -1%YoY
  4. PAT ₹164 Cr +9%YoY

What they filed

Q1 FY27: revenue up 3.2%, net profit up 11.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue709 879 781 756 604 −15%958 +9%730 −7%780 +3%
EBITDA226 328 191 201 168 −26%385 +17%196 +3%215 +7%
Net profit214 279 190 163 182 −15%330 +18%166 −13%182 +12%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Core Domestic Business (excl. Talc & Prickly Heat)
    6% Revenue Growth3% Volume Growth
  • Talcum Powder & Prickly Heat
    -17% Decline
  • Navratna Oil
    6% Growth
  • Pain Management
    17% Growth
  • BoroPlus Antiseptic Creams
    60% Growth
  • Healthcare
    4% Growth
  • Male Grooming
    -9% Decline
  • Kesh King
    -5% Decline
  • Organized Channels
    6% Growth
  • Quick Commerce
    3 x_yoy Growth
  • International Business
    2% Growth
  • International Business (excl. Bangladesh)
    13.6% Growth

Guidance & targets

Profitability

  • Man Company & Zandu Care Losses Profitability · FY26 · Medium confidence Lesser losses
    Yes, yes, absolutely. I think both the Man company and the Zandu Care will definitely have lesser losses compared to the last year.

    — Mohan Goenka

  • CM2 (Contribution Margin 2) Profitability · Next 3 quarters · Medium confidence Improve
    So we will grow, but we have to constantly improve CM2 also. So I don't think we are of course, in terms of percentages, our growth will be much higher than the efficiency improvement that we bring around. But we will have to work on both. And that's what our plan is in the next 3 quarters also, where we drive growth as well as a reasonable CM2.

    — Zairus Master

Revenue

  • Sequential Growth Revenue · Next 3 quarters · Medium confidence Positive month-on-month
    So if you look at the next 3 quarters, our endeavor is to continue to look at sequential growth. The trajectory has to be positive month-on-month. I think that's our endeavor.

    — Zairus Master

What to watch in Q2 FY26

Kesh King growth recovery post-relaunch

Next quarter (Q2 FY26)
Current Declined 5% in Q1 FY26
Target Growth

Why it matters

Kesh King is a significant brand, and its recovery post-relaunch is crucial for overall performance and countering D2C competition.

But yes, Kesh King is, again, a big relaunch in this quarter. Let's hope that it rebounds.

Risks & concerns

  • Unseasonal weather impacting summer-focused portfolio

    high

    The unusually soft and shortened summer season driven by unseasonal rain and early onset of monsoons adversely impacted consumption across summer-focused portfolio, leading to a 17% decline in talcum powder and prickly heat.

    Management acknowledged

  • Urban discretionary consumption remaining under pressure

    medium

    Overall demand environment remained challenging, with urban discretionary consumption continuing to be under pressure.

    Management acknowledged

  • Competition from D2C players

    medium

    D2C players and new D2C interventions in the category were cited as the key reason for Kesh King's decline and a factor in the Male Grooming category.

    Management acknowledged

  • Macroeconomic volatility and geopolitical uncertainty

    medium

    International business delivered a modest 2% growth despite macroeconomic volatility and geopolitical uncertainty in some key markets.

    Management acknowledged

Q&A highlights

6 direct
Male Grooming category long-term growth and structural challenges Partial
I think in my view, Male Grooming is still a very underexploited and an underdeveloped segment of the market, and we are seeing that we are seeing there is a huge potential for that.

Addresses a persistent concern about a key segment, with management acknowledging past issues and outlining a path forward for rejuvenation.

Asked by Abneesh Roy

Urban demand recovery and green shoots Partial
So my commentary may sound a little muted only because we are struggling on our talc and that continues in the second quarter also. But excluding the talc, honestly, and with the relaunch of Kesh King in this quarter and some of the new launches in Smart & Handsome, I'm confident that we will be able to recover much better.

Clarifies the cautious tone on urban demand, linking it to specific category underperformance and outlining drivers for future recovery.

Asked by Abneesh Roy

Pain management growth sustainability in Q2 Direct
Yes, absolutely, Nitin. This 17% growth in the pain management is attributable to early monsoons. This is the peak season for this portfolio. And we have seen the same results in the month of July also. If the monsoon continues, which is predictable that the monsoons are going to be good this year, hopefully, this category should do well.

Provides clarity on the drivers of strong pain management growth and its potential continuation into Q2.

Asked by Nitin

New launch pipeline and innovation strategy Direct
So Harit, the strategy is two-pronged. I'm not it's not that we are averse of completely new categories, but the work is on in those also. But at the same time, see, we have to leverage our existing brands. So as much as we can leverage those, why not?

Explains the company's approach to innovation, balancing new categories with leveraging existing brands for growth.

Asked by Harit Kapoor

A&P spend as a percentage of sales Direct
Not really Harit. I think we will -- we're maintaining our A&P spends as per last year's trends.

Gives insight into the company's marketing investment strategy and its consistency, indicating no significant change in A&P intensity.

Asked by Harit Kapoor

Fair & Handsome growth strategy and issues Direct
So Percy, the Fair & Handsome is primarily the cream portfolio, the fairness cream, which is dragging down the business. Unfortunately, that is not growing despite of change in the brand name. So the only way is to grow the portfolio. And the idea of changing from Fair & Handsome to Smart & Handsome was also that, that we want to get into a larger space of Male Grooming.

Details the specific challenges and strategic shift for a key brand, moving beyond just fairness cream to broader male grooming.

Asked by Percy

Kesh King's decline and problem diagnosis Direct
No. Of course, Percy, the brand team is constantly doing consumer research and understanding the reasons. The key reason has been the D2C players. There have been a lot of new D2C interventions in this category.

Identifies the primary competitive pressure affecting Kesh King and implies a strategic response is underway to counter D2C brands.

Asked by Percy

Commercial sense of the new logo rebranding Direct
Commercially, no, this is more of a corporate logo. So it doesn't have an impact at the consumer or the trade level, very honestly. Because we don't use this logo impacts or in any communication. It was just to celebrate 50 years of Emami and make it more modern, yes.

Clarifies the purpose and impact of a recent corporate action, distinguishing it from consumer-facing brand changes and indicating no direct commercial impact.

Asked by Rahul Agarwal

2 min read 7 chapters

Detailed narrative

Q1 FY26 Performance Overview

Emami Limited reported a challenging Q1 FY26, with overall revenue remaining broadly flat. The demand environment was difficult, characterized by continued pressure on urban discretionary consumption, although rural demand showed early signs of recovery. The quarter was particularly impacted by an unusually soft and shortened summer season due to unseasonal rain and early monsoons, which adversely affected summer-focused products.

Category Performance Highlights

The talcum powder and prickly heat powder category, highly dependent on summer demand, experienced a significant decline of 17% year-on-year. However, excluding these categories, the core domestic business demonstrated resilience with a healthy 6% revenue growth and 3% volume growth. Pain management grew robustly by 17%, and BoroPlus antiseptic creams saw exceptional growth of 60%. Navratna Oil also delivered 6% growth despite the subdued summer, while Male Grooming and Kesh King declined by 9% and 5% respectively.

Distribution and Digital Traction

The company observed continued positive traction in its organized channels, which grew by 6%, with saliency improving by 190 basis points. Quick commerce emerged as a strategic growth channel, scaling up rapidly at nearly 3x year-on-year, further validating the company's omnichannel playbook. Digital-first brands are gaining traction, and Emami is amplifying growth on marketplace and Qcom platforms to enhance reach among new-age consumers.

International Business Update

The international business delivered a modest 2% growth overall, primarily due to macroeconomic volatility and geopolitical uncertainty in some key markets. Excluding Bangladesh, which experienced a muted decline, the international business grew by 13.6%. Emami is making progress in expanding its footprint across Southeast Asian markets and plans to open new geographies during FY26, facilitated by new portfolio launches.

Margin Performance and Profitability

Despite the flat top line, gross margins expanded by 170 basis points to 69.4%, primarily driven by a favorable product mix with higher-margin pain management performing well. EBITDA stood at INR 214 crores, experiencing a marginal decline of 1% year-on-year, with a 20 basis point contraction in margins. Profit after tax grew by 9% to INR 164 crores, indicating improved profitability at the net level.

Innovation and Brand Relaunches

Innovation remains a key growth driver, with new variants launched under Dermicool, Navratna, and BoroPlus brands. Navratna Gold and Zandu Roll On were relaunched, and three new digital-first innovations were rolled out via the Zanducare portal. Smart & Handsome is being extended into other Male Grooming categories, and Kesh King is undergoing a strategic transformation and relaunch in Q2 FY26 to address D2C competition. The Man Company returned to growth in June '25.

Outlook and Strategy

Management anticipates a gradual improvement in the macro environment, supported by buoyant monsoons, stabilizing inflation, and consumption recovery. The company's strategy is two-pronged: leveraging existing brands while also exploring new categories. They aim for positive month-on-month sequential growth and continuous improvement in CM2 for digital-first brands over the next three quarters, with a commitment to long-term value creation.

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