Emami soars 7% as board to consider share buyback on March 24

Meanwhile, in the past three months, the stock has shed 16 per cent, as against 4 per cent decline in the S&P BSE Sensex.

Shares of Emami were up 7 per cent at Rs 369.45 on the BSE in Wednesday’s intra-day trade after the personal care company announced a buyback plan.

The board of directors of the company is scheduled to meet on Friday, March 24, 2023 to consider a proposal for buyback of fully paid-up equity shares of the company, Emami said in an exchange filing.

The primary objective of a share buyback programme is to arrest the fall in the value of a stock by reducing the supply of the stock, which essentially pushes up the share price through a better price to earnings (P/E) multiple.

Shares of Emami had hit a 52-week low of Rs 340.95 on Monday, March 20, 2023. Meanwhile, in the past three months, the stock was down 16 per cent, as against 4 per cent decline in the S&P BSE Sensex. Further, in past six months, it has slipped 30 per cent, as compared to 1.5 per cent fall in the benchmark index.

Emami is one of India’s leading fast moving consumer goods (FMCG) Companies engaged in manufacturing & marketing of personal care & healthcare products.

Volume growth continued to remain a cause for concern for Emami although the base is likely to turn favourable going forward, according to analysts.

Slowdown in rural areas, where Emami has a higher presence (~55 per cent rural mix) vis-a-vis some of the other FMCG peers, has affected topline performance in the near term even as rural penetration continues to progress steadily with Project Khoj. Rural recovery and correction in Pain Management & Healthcare coming into the base should improve growth going forward. Margins are also expected to improve as pressure from input cost inflation moderates, analysts at Nirmal Bang Institutional Equities said in December quarter result update.