Emami

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.

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.

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.

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.

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 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.

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.