2024 is a milestone year for us: RS Goenka on 50 years of Emami

Speaking at the 41st Annual General Meeting of Emami Ltd, RS Goenka, Founder & Non-Executive Chairman, Emami, called the year 2024 as “a milestone year” for Emami.

Launched in the year 1974, the story of brand Emami is not merely a narrative of business – it is a story about the power of unity, the courage to dream, and the relentless hard work required to transform those dreams into reality. Goenka spoke about how he and RS Agarwal made the pivotal decision in the early 70’s to leave their established corporate careers and embark on the uncertain journey of entrepreneurship.

“Innovation, differentiation, and vision for growth have always been the cornerstones of Emami’s journey,” he said, adding, “As we celebrate brand Emami’s journey of 50 years, we take this moment to look forward to the next 50 years.”

Highlighting Emami’s performance in FY 2024-24, Goenka said that despite challenges, the company’s revenues grew by 5% during the year. “Our EBITDA at Rs 950 crore, grew by 10% with margins expanding to 26.5%, an increase of 120 basis points, which are above the pre-COVID levels. Profit after tax saw an impressive growth of 13% to Rs 724 crore,” he added.

He further said, “From our primarily rural market skewed approach, we have expanded ourselves to a universal character, where along with our rural market optimization, we are also present in a space where a section of consumers is keener towards premium, which means we are there for everybody across gender, age, season, geography and demography. Key brands such as Pain Management, Fair and Handsome, Kesh King, and strategic investments generate non-seasonal revenues; the proportion of revenues derived from non-seasonal brands are a high 56% today from 51% in FY2019-20. Further, around 45% of our topline today is generated from acquired brands.”

The beginning of FY2025

In Q1FY25, the country witnessed one of its hottest summers, boosting a healthy demand for summer products but dampening both sales of non-summer products and out-of-home consumption. Further, increasing food inflation continued to impact discretionary consumption.

Goenka said, “In the given macroeconomic context, your Company reported a commendable performance in the first quarter, posting a volume-led profitable growth. While overall revenues at Rs 906 crore grew by 10%, domestic business also grew by 10% with a healthy volume growth of 8.7%.”

Modern trade, eCommerce, and institutional channels continued to post robust growth, while general trade also rebounded to positive territory. “Despite geopolitical crisis and currency depreciations in key geographies, international business grew by 11% in constant currency and by 10% in rupee terms. The performance was led by double-digit growths in MENA and SAARC regions,” he added.

Goenka further said, “Our brands like Navratna, Dermicool, Healthcare range, 7 Oils in One, The Man Company, Brillare, and BoroPlus continue to perform well.”

“Further, gross margins at 67.7% expanded by 230 basis points in Q1. EBIDTA at Rs 216 crore grew strongly by 14%, despite strong investments behind brands, which led to a 21%, surge in A&P spends. Notably, profit before tax at Rs 178 crore grew by 19% and Profit after tax at Rs 153 crore grew by 11%,” he added.

The Indian FMCG industry overview

The FMCG industry, especially personal care products are growing with various new and international brands entering the landscape – premiumization and innovation being the buzzwords. The domestic FMCG Industry has grown at a 5-year CAGR of around 11% in FY24 and is estimated to grow in strong double digits in the coming years on account of rising levels of disposable income, changing lifestyles, increased urbanisation and extensive research & development undertaken by key players.

The surge in e-commerce has significantly contributed to this growth story. With an eye on changing market dynamics and consumer behaviour, exclusive online arms of D2C channels offers a good opportunity for Indian FMCG companies to interact directly with their consumers. They have emerged as a key sales booster with a quick reach out strategy to mobile savvy Indian consumers who have warmed up to the idea of shopping online for their specific needs.

The roadmap ahead

Goenka affirmed that Emami is committed to achieve around double-digit growth in the new financial year, and added that the company’s focus will be on growing revenues with robust margins, generating adequate cash flows to reinvest in its business and strengthening its sustainability. “Emami will keep exploring opportunities to invest in inorganic and strategic opportunities, enabling the company with new product categories that holds promising potential,” he informed.

The company remains optimistic about future growth, supported by a favourable economic landscape, forecast of a normal monsoon, anticipated rural market recovery, government initiatives, and promising macroeconomic factors, all contributing to a confident outlook for sustained positive performance, he added.

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