Emami acquires Dermicool brand for Rs 432 crore; stock hits 52-week low

The stock of Emami has underperformed the market by falling 23 per cent in the past six months, as compared to a 5 per cent decline in the S&P BSE Sensex.

Shares of Emami hit a 52-week low of Rs 442.50, down 2 per cent on the BSE in Monday’s intra-day trade after the company announced the acquisition of "Dermicool", one of the leading brands in Prickly Heat Powder and Cool Talc category from Reckitt,  for a total consideration of Rs 432 crore excluding taxes and duties.  The stock fell below its previous low of Rs 446 touched on March 7, 2022.

The company said the acquisition is funded through internal accruals and is subject to customary closing conditions.

The brand "Dermicool" is popular for providing cooling and respite from prickly heat caused during summer season and has high consumer connect through its marketing campaign jingle, 'Aaya Mausam Thande Thande Dermicool Ka'. It commands around 20 per cent market share in the high growth and low penetrated category.

Combined with Emami's Navratna Cool Talc, Emami will become leader in this niche category, which would also help realise synergetic benefits and optimize costs, Emami said in a press release.

The company considers acquisitions that not only add value and have synergy with the current line of businesses, but also offer opportunities for the organization to be present in categories that have high growth potential. Zandu, Kesh King and German brand Creme 21 are some of the brands or businesses acquired by the company in the past few years, it said.

However, the stock of the company has underperformed the market by falling 23 per cent in the past six months, as compared to a 5 per cent decline in the S&P BSE Sensex. In the last one year, it was down 6 per cent as against a 16 per cent rise recorded by the benchmark index.