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Emami: Buy; PT Rs535
Management expects to retain market leadership and maintain 14-18% sales
growth in top 4-5 brands. Expect Rs400-600mn spending every year in
developing new brands with 2-3 product launches each year.
Strong focus on personal care category and also aim to revive Zandu’s OTC
products.
Newer products like Navratna Extra Thanda Oil, Navratna Cooling Talc has
recorded high sales growth. Accordingly it believes that given the
competition and lower product-life cycle, brand extension remains the key to
lower the break-even period of product.
Management indicated raw material costs are likely to be maintained and
company is evaluating price hikes and grammage reductions. Advertising
expenses are likely to remain at 18%, and slight tapering could be likely.
M&A potential will likely depend on synergistic opportunities and
management has earlier indicated that they could value deals at a premium if
it makes strong business sense over the long term. Their break-even
benchmark is 5-7 years.
Strategy of deeper penetration, strong distribution, focused advertisements
should drive category growth. Today’s lifestyle and ayurvedic products
(given its good acceptance) should drive the growth. Ayurveda is not wellmarketed
in India.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Emami: Buy; PT Rs535
Management expects to retain market leadership and maintain 14-18% sales
growth in top 4-5 brands. Expect Rs400-600mn spending every year in
developing new brands with 2-3 product launches each year.
Strong focus on personal care category and also aim to revive Zandu’s OTC
products.
Newer products like Navratna Extra Thanda Oil, Navratna Cooling Talc has
recorded high sales growth. Accordingly it believes that given the
competition and lower product-life cycle, brand extension remains the key to
lower the break-even period of product.
Management indicated raw material costs are likely to be maintained and
company is evaluating price hikes and grammage reductions. Advertising
expenses are likely to remain at 18%, and slight tapering could be likely.
M&A potential will likely depend on synergistic opportunities and
management has earlier indicated that they could value deals at a premium if
it makes strong business sense over the long term. Their break-even
benchmark is 5-7 years.
Strategy of deeper penetration, strong distribution, focused advertisements
should drive category growth. Today’s lifestyle and ayurvedic products
(given its good acceptance) should drive the growth. Ayurveda is not wellmarketed
in India.
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