Buy Emami -Target 640 :: Anand Rathi

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Emami                                                   Closing 492                                                             Target 640

Investment Rationale

~ Power brands growing consistently

~ Synergies of Zandu products and sub-segmentation strategy to work for the company

~ Focusing on sales and distribution    

~ Consistent dividend payer

~ Plans: revive healthcare and enter glucose drinks

~ Widening footprint domestically and internationally

~ Strong financial performance – Q4FY12 and FY12

~ Valuation

At current price the stock trades at 24.2x and 20.7x its FY13E and FY14E earnings respectively. We see an EPS growth of 20% and 17% for FY13 over FY12 and FY14 over FY13 respectively. The stock looks attractive with a good leadership position in the markets and new products lined up. We see target price of 640 for next 12 months.

Thanks & Regards

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