Emami expects sales rebound in post-demonetisation period

The company sees 12-14% growth in FY18

Fast-moving consumer goods (FMCG) company Emami expects sales to bounce back after demonetisation and has projected a 12-14 per cent growth in 2017-18.

“Growth anywhere between 12 per cent and 14 per cent is what we expect for next year,” Mohan Goenka, executive director, Emami, said in an investor’s conference call. He said the wholesale market had revived after demonetisation. “It is not absolutely back to normal, but in the next one or two months it should be back to normal,” he told analysts.

Emami will focus on increasing its direct retail reach to 800,000 outlets by 2017-18 from 640,000 now. The company will also bank on product launches to drive business. Besides, it is working on information technology to create a direct supply chain.

“The more direct our reach the less our dependence on distributors. We cannot do it overnight because we have to reach villages,” Goenka added.

Emami expects its brands like Kesh King, Boroplus, Fair & Handsome, Navratna Oil and the balms category will drive growth. “We are reworking our strategy for Fair & Handsome. We are trying something new in this category,” Goenka said.

During the quarter ended December, sales of Emami’s portfolio of balms fell in the south, as did sales of Navratna and Fair & Handsome products nationwide. Navratna Cool Oil sales declined by four per cent, balm sales declined by five per cent and Fair & Handsome cream sales declined by 18 per cent during the quarter. Sales of the health care range also fell by six per cent.

Against a net revenue of Rs 724.85 crore during the third quarter of 2015-16, Emami posted revenue of Rs 726 crore in the December quarter. Its net profit remained flat at Rs 134.34 crore.