Emami hikes product prices to offset cost pressure, launches project Khoj

FMCG major Emami Ltd has raised product prices on an average by four per cent to offset the present input cost pressure that will help the company to retain a gross margin of 66-67 per cent.

FMCG major Emami Ltd has raised

product prices on an average by four per cent in the current fiscal to offset the present input cost pressure that will help the company to retain a gross margin of 66-67 per cent, a senior company official said on Sunday.

The company's long awaited project Khoj that aims deeper rural reach to retain profitability momentum, has been launched in Uttar Pradesh with the relaxation of lockdown. The project "we had already rolled out got delayed due to COVID-19 disruptions since last year," the official said.

"We have a price hike of four per cent so far and this will take care of our existing cost pressure as of now. We will decide accordingly depending upon the situation going forward," Emami Director Mohan Goenka told PTI.

"With the price rise we do not foresee any pressure on gross and EBITA margins as of now," he said.

Pain and summer brands portfolios were among categories where price rise was witnessed.

The four areas of marketing, Emami, was focusing on e-commerce, standalone modern trade, chemist outlet expansion and the fourth is project Khoj.

"Project Khoj is a rural project where we have identified 13 states where we would go very deep into 3,000 population villages, but we would start with only four high potential states as of now. We have just begun our journey with unlock taking place," Goenka said.

The states in the first leg of the projects are Uttar Pradesh in the north, Bihar in the east, Maharashtra in the west and Andhra Pradesh in the South.

"We have tied up with a lot of single standalone stores and we are seeing significant growth there. There also we have hired a new team who would look at this. On chemist outlet expansion, we have identified almost 20,000 chemist outlets with high potential chemists who would be covered by an exclusive team," Goenka said, detailing the marketing focus.

E-commerce contribution is roughly 3.7 per cent of the domestic sales which has almost increased by three times in the fourth quarter of FY21.

Emami will strengthen the Zandu e-commerce platform and will also launch exclusive products along with aggressive campaigns.