Emami open for stakes in new age companies

FMCG major Emami Ltd, which sharpened its focus on modern trade and e-commerce channels, has also decided to go forward with prudent strategic stakes in new age companies dealing in online premium male grooming and professional salon products, an official said on Wednesday.

"Investing in new-age start-ups has been another highlight in the business strategy of your company. Sole focus on conventional organic route has the potential of lost opportunities while acquisitions also have their own set of challenges," its Chairman R.S. Agarwal told shareholders at the 35th Annual General Meeting of the company.

"Hence, your company decided to go forward with prudent strategic stakes in new age companies dealing in online premium male grooming and professional salon products," he said.

The company, which has been widening its distribution network, added 1.2 lakh direct retailers to take up the total coverage to 8.5 lakh.

"Keeping the changing times in stride, your company has also sharpened its focus on modern trade and e-commerce channels," he said.

In the international sphere, the company strategically commissioned a third-party manufacturing unit in Sri Lanka in order to deepen its footprints in a growing geography.

"With annual growth of 14 per cent last year, the company is poised to expand its portfolio in key markets by launching new products," Agarwal said.

Speaking on the implementation of Goods and Services tax (GST) he said: "This had an initial impact on the companies like ours. The new ways of working disrupted sales channels particularly wholesale."

Fast Moving Consumer Goods (FMCG) industry as a whole posted its slowest revenue growth rate in two years with CAGR of 4 per cent compared to 13 per cent across the last decade.

Companies with rural focus are set to reap benefits of various reforms like higher MSP (minimum support price), farm loan waiver schemes, direct transfer of government subsidies and so on, he said.

In the first quarter of current financial year, the company reported consolidated net sales of Rs 614.38 crore and EBIDTA of Rs 123.52 crore.

--IANS

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