FMCG firm Emami on Thursday reported a 59.42 per cent year-on-year (YoY) drop in consolidated net profit to Rs 144.43 crore in the January to March quarter (or Q4FY23). Net profit was at Rs 355.96 crore in the year-ago period on lower tax expense.
The company said that it had accounted for MAT (minimum alternate tax) credit entitlement for earlier years in Q4FY22 amounting to Rs 230.3 crore while there was no MAT credit entitlement accounted in the current quarter for earlier years and hence the profit was lower.
Profit before tax stood at Rs 147.87 crore in Q4FY23 was up 51.11 per cent from Rs 97.85 crore in the same period last year.
Revenues from operations at Rs 835.95 crore in Q4FY23 was higher by 8.8 per cent from the year-ago period.
The company said that the FMCG industry witnessed a mixed demand environment in Q4FY23, as discretionary categories like personal care continued to remain muted on account of reduction of non-essential expenditure by rural consumers.
“Inflation in rural areas reached 6.8 per cent in FY23, the highest level in the previous nine years, and rural inflation surpassed urban inflation for the first time since FY18. Additionally, excessive rainfall in many areas of the country in March impacted the demand for summer products,” it said.
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The domestic business grew by 5 per cent during the quarter. The international business grew by 19 per cent primarily driven by the MENA, CIS and Bangladesh markets.
Commenting on the performance, Harsha V Agarwal, Vice Chairman and Managing Director, Emami, said, that despite a challenging demand scenario on account of high inflation, muted rural sentiments and unseasonal rains, the company delivered a resilient profit-led growth in Q4FY23.
“After few quarters of ongoing pressure on input costs, we have been able to expand our gross and EBIDTA margins delivering 20 per cent EBIDTA growth. Our strategic investments and Dermicool acquisition have performed well and contributed to this growth,” he said.
Mohan Goenka, Vice Chairman and Executive Director, Emami said, while, new age channels such as modern trade and e-commerce plus D2C grew strongly by 18 per cent and 64 per cent respectively in the domestic market, the international business also reported a strong growth of 19 per cent during the quarter despite economic and geo-political challenges in key markets.
“With softening of input costs and decreasing inflationary pressures we are hopeful of a better demand scenario and improved margins in FY24,” Goenka added.
For full FY23, revenues were at Rs 3,405.73 crore compared to Rs 3,187.22 crore in FY22. Net profit was at Rs 573.02 crore compared to Rs 867.29 crore in the same period last year.