📌 At a Glance
Emami Ltd has delivered a sluggish sales CAGR of just 7% over the past 5 years, with a decent profit rebound in FY25. Despite household brands like BoroPlus and Zandu Balm, it faces growth challenges. With ROCE at 34% and a P/E of 31, it smells more like nostalgia than a next-gen FMCG rocket.
🧴 1. What Does Emami Even Do?
If you’ve ever:
- Applied BoroPlus in winter,
- Got high on Zandu Balm fumes during board exams, or
- Felt manlier thanks to Fair and Handsome (RIP that branding),
…then you’ve helped Emami become one of India’s most iconic FMCG brands.
Core Segments:
- Personal Care: BoroPlus, Navratna, Fair & Handsome, Kesh King
- Healthcare: Zandu Balm, Pancharishta, Mentho Plus
Their business is largely India-centric, with minor exports. Think of them as the nostalgia-powered Dabur, but with more hair oil.
📈 2. 5-Year Financials: Profits Came, Growth Didn’t
Revenue Growth (FY20–FY25)
| Year | Revenue (Cr) | Growth |
|---|---|---|
| FY20 | 2,655 | – |
| FY21 | 2,881 | 8.5% |
| FY22 | 3,192 | 10.8% |
| FY23 | 3,406 | 6.7% |
| FY24 | 3,578 | 5.0% |
| FY25 | 3,809 | 6.4% |
CAGR: ~7% over 5 years. That’s not exciting. That’s “safe FD” territory.
Net Profit Growth (FY20–FY25)
| Year | Net Profit (Cr) | Growth |
|---|---|---|
| FY20 | 302 | – |
| FY21 | 455 | 50.7% |
| FY22 | 837 | 84.0% |
| FY23 | 627 | -25.1% |
| FY24 | 724 | 15.4% |
| FY25 | 803 | 10.9% |
Not bad. Emami’s margins are good, but they fluctuate like mood swings on Pancharishta.
💰 3. Margins, ROCE & Other Sexy Metrics
- OPM: Hovered between 25–31%. Good but not category-crushing.
- ROCE: Solid at 34% in FY25. Clearly they know how to squeeze that balm tube.
- Debt: Minimal. Debt-to-equity is laughable.
- Dividend Payout: ~54% in FY25 — decent.
🚨 BUT: Working capital days are up to 72.2 — big rise from 49 two years ago. Cash stuck in shelves?
🧾 4. Balance Sheet Breakdown (FY25)
| Metric | Value (Cr) |
|---|---|
| Equity Capital | 44 |
| Reserves | 2,651 |
| Total Borrowings | 90 |
| Fixed Assets | 986 |
| Investments | 676 |
| Other Assets | 1,859 |
| Total Assets | 3,534 |
Conservative capital allocation, but they’ve been increasing investments lately — possibly prepping for inorganic growth?
🧠 5. Promoter Moves & Pledges
- Promoter holding: 54.84%
- FII holding: 12.11% (down from 14.38% a year ago)
- Diwakar Finvest pledged 5.82% of equity to Bajaj Finance recently (June 2025)
That’s a bit of a “Zandu ka jhatka.” The pledge move doesn’t scream confidence.
📉 6. Valuation: Fair or Just Familiar?
- Current Price: ₹570
- EPS (FY25): ₹18.48
- P/E: ~31
- Book Value: ₹61.7 → P/B: 9.24x (insanely high)
Compared to:
- Dabur: P/E ~48
- Colgate: P/E ~45
- Emami: 31 — okayish, but not a steal
🧮 Fair Value Range (EduInvesting Method)
- At 22–25x P/E on FY25 EPS of ₹18.5 → ₹407 – ₹462
- Current Price: ₹570 ❌
So you’re paying ~35% above our conservative fair value. Nostalgia premium?
🔮 7. Verdict: Can Balm Stocks Cure Portfolio Pain?
If you’re looking for safe, high-ROCE FMCG with iconic brands, Emami is a decent long-term hold. But:
❌ Weak sales growth
❌ Working capital bloated
❌ Some promoter pledging
❌ 9x book value
It’s not a multibagger. It’s a “boroplus dividend compounder”.
Good for retirees, not for momentum bros.
✍️ Written by Prashant | 🗓️ 19 June 2025
Tags: Emami Ltd, Zandu Balm, BoroPlus, FMCG stocks India, ROCE kings, stock analysis, Fair Value, EduInvesting 5-Year Recap
