Emami

Emami reported a challenging Q4 FY26, with consolidated revenues declining 4% YoY to ₹925 crores. This decline was primarily attributed to a significantly delayed onset of summer, inconsistent temperatures, and unseasonal rainfall, which adversely impacted the summer portfolio. Additionally, geopolitical headwinds in the Middle East disrupted international business, leading to a 5% decline in this segment. Despite these challenges, the company maintained underlying momentum in its domestic business excluding the summer portfolio.

The domestic business, excluding the summer portfolio, demonstrated strong resilience, growing 11% in Q4 FY26. However, the summer portfolio acted as a significant drag, declining 22%, with talcum powders alone seeing a 40% decline. Management expressed high confidence that summer brands like Navratna and Dermicool would achieve double-digit growth in H1 FY27, indicating an expected rebound from the Q4 weakness.

Despite the revenue decline, Emami successfully expanded its gross margins. In Q4 FY26, gross margins improved by 250 basis points to 68.4%, and for the full year FY26, they expanded by 130 basis points to 69.9%. This improvement was attributed to rigorous cost discipline and judicious pricing actions. However, Q4 EBITDA declined 15% to ₹187 crores and PAT declined 12% to ₹143 crores, primarily due to operating deleverage and increased advertising and promotional spends (up 12% in Q4).

Emami's strategic investments portfolio showed impressive growth of 34% in Q4 FY26. The company aims to sustain a 30% year-on-year growth for its investee companies, targeting an absolute EBITDA increase of ₹15 crores this year. Acquisitions like Axiom (fruit juice) are already profitable, contributing ₹40-45 crores in EBITDA, and IncNut (Vedix & SkinKraft) is focused on personalized beauty with high gross margins, indicating a clear path for future growth and profitability from these ventures.

The company's channel strategy continues to evolve positively, with organized channels increasing their salience to approximately 32% of domestic business. Wholesale channel dependency reduced to 27% of total domestic sales. Quick Commerce was a standout performer with 70% growth, and GT Marts grew 25%. Emami currently reaches about 500,000 outlets and 100,000 towns, with a focus on improving distributor hygiene, stock health, and credit management to ensure partner satisfaction and sustained growth.

The international business faced significant stress in March 2026, declining 5% in Q4 FY26, primarily due to geopolitical disruptions in the Middle East affecting supply chains and increasing freight costs. Prior to this, the segment was growing at a double-digit pace. Management expects Q1 FY27 to show single-digit growth, with a return to good double-digit growth from Q2 FY27 as supply chain disruptions are streamlined.