Emami — Q4 FY25 earnings call

Call held 16 May 2025

Management summary

Emami delivered robust Q4 and full-year FY25 results, with strong growth in its core domestic business and a return to growth in international markets. Despite subdued mass urban demand and challenges in specific brands like Kesh King and Zandu Balm, strategic initiatives, new product launches, and a focus on profitability for acquired brands are expected to drive continued growth in FY26. The company also announced a significant dividend payout for FY25.

Highlights

  • Consolidated revenue for Q4 FY25 stood at ₹963 crores, an increase of 8% YoY.

  • Full-year FY25 consolidated revenue grew by 6.5% to ₹3,809 crores.

  • Q4 FY25 Gross Margins expanded by 10 bps to 65.9%; full-year Gross Margins expanded by 100 bps to 68.6%.

  • Q4 FY25 PAT grew by 9% to ₹162 crores; full-year PAT grew by 11% to ₹806 crores.

  • Core domestic business grew by 11% in Q4 FY25 with 7% volume growth, driven by Navratna/Dermicool (+16%) and BoroPlus (+27%).

  • International business returned to growth in Q4 FY25, posting a 6% increase.

  • Board approved a special interim dividend of ₹2 per share, bringing total FY25 dividend to ₹10 per share (1000% payout), representing 49% of adjusted PAT.

  • New CEO appointed for The Man Company, with a focus on growth and profitability.

Concerns

  • Impact of unseasonal weather on summer portfolio in Q1 FY26

Key financials

2 periods

Q4

  • Consolidated Revenue
    ₹963 Cr
    YoY +8%
  • Consolidated Gross Margin
    65.9%
  • Consolidated EBITDA
    ₹219 Cr
    YoY +4%
  • Consolidated PAT
    ₹162 Cr
    YoY +9%

FY25

  • Consolidated Revenue
    ₹3,809 Cr
    YoY +6.5%
  • Consolidated Gross Margin
    68.6%
  • Consolidated EBITDA
    ₹1,025 Cr
    YoY +8%
  • Consolidated EBITDA Margin
    26.9%
  • Consolidated PAT
    ₹806 Cr
    YoY +11%

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

  • Domestic Business (Overall)
    9% Q4 Growth5% Q4 Volume Growth7% FY25 Growth
  • Core Domestic Business
    11% Q4 Growth7% Q4 Volume Growth
  • Organized Channels (Domestic)
    13% FY25 Growth28% Contribution to Domestic Revenue (FY25)
  • International Business
    6% Q4 Growth20% Contribution to Total Revenue
  • The Man Company
    ₹150 Cr FY25 Revenue
  • Brillare
    ₹50 Cr FY25 Revenue
  • Zanducare (D2C)
    50% Growth80% Contribution to Zandu Care Sales
  • Navratna and Dermicool
    16% Q4 Growth
  • BoroPlus
    27% Q4 Growth
  • Healthcare
    13% Q4 Growth
  • Pain Management
    1% Q4 Growth
  • Smart and Handsome
    7% Q4 Growth
  • Kesh King
    0% Q4 Growth

Capital allocation

high confidence
  • Dividend ₹2/share (special) Payout ratio 49%
    I am pleased to share that the Board of Directors have approved a special interim dividend of 200% translating to Rs. 2 per equity share while celebrating 50 years of Emami. Including the earlier two interim dividends of 400% each, that is Rs. 4 per share declared in Q2 and Q3, the total dividend payout for FY '25 stands at 1000% or Rs. 10 per share, representing a payout ratio of 49% on adjusted PAT, fully aligned with our dividend policy and committed to maximizing shareholders value.

Guidance & targets

Brand Growth

  • Brillare and The Man Company growth Brand Growth · FY26 · Medium confidence High double-digit growth
    So when we look at FY 26, both for Brillare as well as for TMC, we are looking forward to a high double-digit growth in both these businesses.

    — Giriraj Bagri

  • Healthcare growth Brand Growth · FY26 · Medium confidence 5-6% growth
    Healthcare, we are very optimist of double-digit growth. Other than pain management, I think we are expecting 5%, 6% growth, others should do slightly better.

    — Mohan Goenka

Pricing

  • Pricing growth Pricing · FY26 · Medium confidence 2-3%
    Should expect in similar lines, Harit, around 2% to 3%.

    — Mohan Goenka

New Product Development

  • New product revenue contribution New Product Development · FY26 · Medium confidence 3%
    should be in the range of 3%, again depends on the success we get going ahead on that.

    — Rajesh Sharma

  • Pain management new launches New Product Development · FY26 · High confidence Two new launches
    Yes, yes, absolutely. This year you will see two new launches.

    — Mohan Goenka

Strategic Initiatives

  • Kesh King strategy rollout Strategic Initiatives · Q2 FY26 · High confidence Rollout in Q2
    At the same time, I must say that the strategy for Kesh King is also ready by BCG. Hopefully we will be rolling out in the second quarter.

    — Mohan Goenka

  • Male grooming launches (Smart & Handsome) Strategic Initiatives · Q2 FY26 · High confidence Rollout in Q2
    And on the other male grooming launches that we have planned for this year, we have plans in place, we will be rolling out in Q2.

    — Mohan Goenka

Profitability

  • The Man Company profitability Profitability · Some time · Low confidence Get to profit
    Plus, at the same time, of course, the targets are to see that the brands get to profit in some time. I am not expecting profits immediately, but of course the long term target is to get these brands to profitability.

    — Mohan Goenka

Market context

  • All-round growth Overall Performance · FY26 · Medium confidence Robust
    With our international business and strategic investments showing promising signs of rebound, we are excited about delivering robust all-round growth in FY '26.

    — Mohan Goenka

What to watch in Q1 FY26

Kesh King strategy rollout and impact

Q2 FY26
Current Strategy ready by BCG
Target Rollout in Q2 FY26 and initial impact on performance

Why it matters

Kesh King delivered flattish growth in Q4; successful strategy implementation is crucial for its turnaround and contribution to overall growth.

At the same time, I must say that the strategy for Kesh King is also ready by BCG. Hopefully we will be rolling out in the second quarter.

Risks & concerns

  • Impact of unseasonal weather on summer portfolio in Q1 FY26

    high

    Sporadic rainfalls across India have caused a 'slight dent' in summer sales, particularly affecting the talc category, posing a challenge for Q1 FY26.

    Management acknowledged

  • Subdued mass urban demand

    medium

    Consumption demand trends in Q4 remained similar to the previous quarter, with mass urban demand remaining subdued.

    Management acknowledged

  • Revenue decline in strategic investment portfolio

    medium

    The overall domestic business absorbed a 12% revenue decline from the strategic investment portfolio in Q4.

    Management acknowledged

  • Challenges in Kesh King and The Man Company brands

    medium

    The company is proactively addressing challenges in Kesh King and The Man Company through strategic actions.

    Management acknowledged

  • Geopolitical and macroeconomic challenges in international markets

    medium

    International business faced challenges in Bangladesh, Middle East, and some parts of Africa, though it returned to growth in Q4.

    Management acknowledged

  • Stress in Zandu Balm (green pack) within pain management

    low

    While other pain management products are growing, the main Zandu Balm (green pack) is showing signs of stress.

    Management acknowledged

Q&A highlights

6 direct
The Man Company leadership change and strategy for growth and profitability Direct
the target is to get back to growth, to take The Man Company and other startups on the fast track, how can we get to substantial growth. Plus, at the same time, of course, the targets are to see that the brands get to profit in some time.

Highlights the strategic importance of The Man Company and the clear mandate for the new CEO to drive both growth and profitability, addressing past volatility.

Asked by Abhneesh Roy

Outlook for cooling products in Q1 FY26 given unseasonal weather and high base Partial
This quarter is slightly challenging as far as the summer portfolio is concerned... summer has seen a slight dent... talc is the one which is facing the heat.

Indicates potential headwinds for the summer portfolio in the current quarter due to external factors, suggesting a cautious outlook for a key seasonal category.

Asked by Abhneesh Roy

Success of Fair and Handsome rebranding to Smart and Handsome Direct
it was all round 360° plan, right from changing the brand name to very aggressive marketing, both urban, rural, TV, OTT, digital, so everything. I think in Q4 we went very aggressive on go to market strategy.

Confirms the success of the rebranding efforts, with Smart and Handsome achieving 7% growth and arresting previous de-growth, validating the comprehensive strategy.

Asked by Percy Panthaki

Growth strategy and new product pipeline for the pain management category Direct
we have a robust plan for new products in pain management. We have launched a couple of products under this Zandu, and this year again we are launching one or two new offerings.

Addresses the slow 1% growth in Q4 for pain management by outlining a clear strategy focused on new product development to revitalize the segment.

Asked by Harit Kapoor

Outlook on input costs and gross margin pressure for FY26 Direct
you have seen that our GCs have been at all-time high. And I have continuously been maintaining that I do not see any pressure on our GCs this year also. So, you are right, the costs are benign.

Provides reassurance on margin stability for the upcoming fiscal year, indicating that benign input costs will help maintain high gross margins.

Asked by Ajay Thakur

Contribution of new products to revenue and future targets Direct
roughly it is around 4% kind of revenue what we have generated from the products launched in last two to three years... should be in the range of 3%, again depends on the success we get going ahead on that.

Clarifies the impact of recent innovations on revenue and sets expectations for new product contribution in the next fiscal year, indicating a sustained focus on NPDs.

Asked by Percy Panthaki

Overall strategy for new product launches and category adjacencies Direct
never complete. There are a lot of opportunities in Zandu. In pain I said there are a couple of launches planned, in mail grooming, in Kesh King also there are some D2C areas that we are going to come out with.

Emphasizes a continuous and diversified NPD pipeline across various categories and channels (D2C, e-com, mass market), highlighting ongoing growth opportunities.

Asked by Percy Panthaki

3 min read 7 chapters

Detailed narrative

Q4 and Full Year FY25 Financial Performance

Emami reported a consolidated revenue of ₹963 crores for Q4 FY25, marking an 8% year-on-year increase. For the full fiscal year, consolidated revenue reached ₹3,809 crores, growing by 6.5%. Gross margins expanded by 10 basis points to 65.9% in Q4 and by 100 basis points to 68.6% for the full year. EBITDA for Q4 stood at ₹219 crores (+4% YoY), while full-year EBITDA grew 8% to ₹1,025 crores, with margins improving by 40 basis points to 26.9%. Profit after tax for Q4 was ₹162 crores (+9% YoY) and ₹806 crores (+11% YoY) for the full year.

Domestic Business and Category Performance

The core domestic business demonstrated robust growth, increasing by 11% in Q4 FY25 with a 7% volume growth. Key categories like Navratna and Dermicool grew by 16%, BoroPlus by 27%, and Healthcare by 13%. The newly rebranded Smart and Handsome achieved 7% growth, while Kesh King experienced flattish growth and pain management grew by 1%. Overall domestic business grew 9% in Q4 (5% volume growth) after absorbing a 12% decline from the strategic investment portfolio. For FY25, domestic business grew 7%, with organized channels growing 13% and contributing 28% to domestic revenue.

Strategic Investments and New Initiatives

Emami is actively addressing challenges in Kesh King and The Man Company, with a BCG-developed strategy for Kesh King set for Q2 FY26 rollout. The Man Company saw the appointment of Mr. Zairus Master as CEO/Director, tasked with driving growth and profitability. The D2C platform, Zanducare, grew over 50% year-on-year in FY25, with products launched in the last two years contributing 50% to its total sales. The company also launched Emami Pure Glow in the brightening skincare category and plans two new pain management products in FY26.

International Business Performance

Despite geopolitical and macroeconomic challenges in regions like Bangladesh, the Middle East, and parts of Africa, the international business returned to growth in Q4 FY25, posting a 6% increase. This segment now contributes approximately 20% to the company's total revenue. Performance was strong in SAARC, Southeast Asia, CIS, and other African regions, with Bangladesh showing significant improvement.

Shareholder Returns and Capital Allocation

The Board of Directors approved a special interim dividend of 200% (₹2 per equity share) for Q4 FY25. Including previous interim dividends of 400% each (₹4 per share) in Q2 and Q3, the total dividend payout for FY25 stands at 1000% (₹10 per share). This represents a payout ratio of 49% on adjusted PAT, aligning with the company's dividend policy and commitment to maximizing shareholder value.

Outlook and Key Growth Drivers for FY26

Emami is optimistic about delivering robust all-round growth in FY26, anticipating a gradual pickup in consumption driven by easing inflation and government initiatives. The company expects high double-digit growth from Brillare and The Man Company, 5-6% growth from Healthcare, and 2-3% pricing growth. New product launches are projected to contribute around 3% to revenue. Strategic actions in male grooming and Kesh King are expected to build positive momentum, with several new launches planned for Q2 FY26.

Market and Seasonal Challenges

Consumption demand trends in Q4 remained similar to the previous quarter, with rural markets performing well but mass urban demand remaining subdued. The summer portfolio, particularly talc, is facing a 'slight dent' in Q1 FY26 due to unseasonal rainfalls across India and a high base from the previous year. Management acknowledged these challenges but expressed confidence in mitigating their impact through other portfolio strengths and disciplined trade loading.

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