Looking to invest in 8 to 10 strong brands: Emami V-C, MD Harsha V Agarwal

Agarwal talks about the plans to make The Man Company a Rs 1,000 crore brand, and the focus going ahead

Kolkata-based fast-moving consumer goods firm Emami on Saturday said it would buy the balance 49.6 per cent stake in Helios Lifestyle Pvt Ltd, the owner of men’s grooming brand The Man Company, giving it complete ownership. In an interview in Kolkata, Emami Vice-chairman and Managing Director Harsha V Agarwal takes Ishita Ayan Dutt through the plans to make The Man Company a Rs 1,000 crore brand, and the focus going ahead. Edited excerpts:

How do you plan to scale up The Man Company?
 

The brand has good potential. Last year, we ended up with a top line of around Rs 180 crore and in the next three years we can reach Rs 500 crore. The broader idea is to make it a Rs 1,000 crore brand in 5-6 years.

Are there any plans to take it international?
 

There is scope and potential. But our focus will be more on the domestic market — that is where we see a lot of growth because men’s grooming is an under-penetrated category. There is also a clear gap of a strong brand that stands for leadership in the men’s grooming category and that is where The Man Company has a strong role to play.

Are you focusing on acquisitions in the D2C space?
 

We are focusing on new-age omnichannel brands that may be digital-first where e-commerce might be the way to enter the market. Ultimately, all brands, heritage or new-age, have to be omnichannel.
 

But yes, our focus is going to be also on the new-age brands. Till now, we have invested in around five such companies and brands. Going forward, we are looking for opportunities in more such brands and the idea is to invest in 8 to 10 such strong brands and build a portfolio for our company in 2-3 years.

Would you look at acquiring the brands or companies where you have made strategic investments?
 

Apart from The Man Company, there is another company, Brillare (hair and skincare brand), where we already have a substantial stake. The idea is to build a portfolio for Emami.
 

We don’t have a defined time period, but depending on different promoters, we see how it can become a part of the Emami portfolio. We have identified future growth categories where Emami would like to enter through this route.

What are these growth categories?
 

Some of the categories we have invested in — pet care is one. Nutrition is another.
 

Health foods is another category, which has a huge potential. Personal care and health care are exciting categories where we are looking at premium and niche products. As we move forward, we keep identifying categories on the basis of consumer trends.

So health foods entry would be through an acquisition?
 

If we come across the right opportunity at the right price, it’s certainly an area of interest for us. This is from the area of new-age brands but that doesn’t mean we are not looking for opportunities in heritage brands.

Acquisitions have been a growth strategy for Emami. How have they panned out?
 

We are very happy with the way acquisitions have turned out for Emami. This is one of the important pillars for our growth in the past and going forward also, I see it as an important pillar for growth. Around 45 per cent of our top line and more than 50 per cent of our bottom line come from acquired brands.

How is the overall demand environment in the domestic market?
 

We have done well in the first quarter of the current financial year. Growth is a bit subdued but we believe the rural market has improved a bit in comparison to what it was the last two years. Going forward, with the forecast of a better monsoon and government spending in rural areas, we believe the rural demand should increase.

Urban has done well in comparison to rural in the last one or two years where premium products are gaining ground. That trend is going to continue for some time.

You have projected double-digit growth this year. Is it on the back of the domestic market?
 

Our international contribution is not even 10 per cent. If we have to target 10 per cent (double-digit) growth, it has to be based on domestic growth. International also has to contribute towards that. There are geopolitical challenges, but we have been able to achieve decent growth in Q1 to the tune of around 10 per cent even in the international market.

Have you worked out the financial impact of the Bangladesh unrest?
 

Things are improving. There is no financial impact as such. These sorts of challenges do come in different markets and hence, as a company, we just need to realign ourselves.