Emami may emerge stronger post Covid-19 pandemic with increased consumer spends on FMCG brands with health benefits

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Emami is a very aggressive FMCG company with products in under-penetrated and growth segments of the industry. Post Covid, new launches in the health category will drive revenues and profits. Past few quarters performance has been disappointing due to weather and transient factors and then the lockdown led to sharp sales decline. However, many of these challenges are being addressed and the management is confident of double digit revenue growth over the longer terms with commensurate improvement in earnings. Excluding amortization of brands acquired, the valuation is very attractive. We have an over weight rating as growth should pick up in a sustainable manner due to consumer preference for health products. Risk associated with high promoter pledge have been addressed – 19-08-2020 Price : 244.20 Rating : Over Weight Recommendation: Buy

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