Emami Q1 net profit falls 16.4% as higher input costs squeeze margins

The FMCG maker reported a decline in quarterly profit as elevated input costs linked to the West Asia conflict compressed margins, even as revenue grew nearly 15 per cent.

Fast-moving consumer goods (FMCG) firm Emami on Tuesday reported a 16.4 per cent year-on-year (Y-o-Y) drop in consolidated net profit to ₹137.35 crore for the April-June quarter of the current financial year (Q1FY27), as elevated input costs triggered by the West Asia conflict impacted margins. Net profit in the year-ago period was at ₹164.26 crore. 

The company said the quarter witnessed one of the sharpest inflationary that the sector has faced in recent years. Input costs rose, driven by higher crude oil prices and inflation in packaging materials as well as several other key inputs. 

As a result, gross margins contracted by 360 basis points to 65.8 per cent, the company said. Consolidated revenue from operations in Q1FY27 was, however, up 14.95 per cent Y-o-Y to ₹1,039.21 crore. 

 

Sequentially, revenue was up 12.3 per cent and net profit down 4.1 per cent. 

Apart from inflationary pressures and disruptions from the West Asia conflict, Emami noted that the quarter also unfolded against a mixed summer backdrop, with intense heat in South and West India but relatively milder conditions in the North and East. 

Commenting on the performance, Emami's Vice Chairman and Managing Director Harsha V Agarwal said that despite a challenging operating environment marked by geopolitical disruptions, elevated inflationary pressures and an uneven summer season across markets, the domestic business grew 20 per cent, driving overall revenue growth of 15 per cent reflecting the strength of the company’s brands and execution capabilities. 

“We are particularly encouraged by the growing contribution of our strategic investments portfolio, which now accounts for nearly 18 per cent of our domestic business, reinforcing our strategy of building multiple growth engines alongside our trusted core brands,” he added. 

Mohan Goenka, vice chairman and whole-time director, Emami, said that the quarter tested the resilience of Emami’s operating model as elevated input costs continued to exert pressure on margins. “Despite this, our focus on disciplined execution, cost optimisation and operational agility enabled us to deliver Ebitda growth of 6 per cent to ₹226 crore and profit before tax (PBT) growth of 4 per cent to ₹195 crore,” he said. 

Goenka also said that as input cost pressures begin to ease and the company’s innovation pipeline gains momentum, it remains well positioned to strengthen profitability while sustaining growth across businesses.