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Winter spoils Emami’s summer; latest quarter growth dips to single digit

Prachi Gupta

Emami, the maker of Navratna oil, BoroPlus and Zandu balm, said that prolonged winters have drastically reduced summer products sales. The company, whose 40% sales are driven by the summer portfolio, has been adversely impacted with an extended winter pushing back the onset of summer, Mohan Goenka, Director, Emami Limited said. Emami sells cool oils, talcs and deodorants under its summer portfolio. Along with this, Emami has suffered the onslaught of rural slowdown, which has affected most of the major brands as well.

Joining the list of companies which took the brunt of the consumer slowdown including Godrej, ITC, Dabur, Britannia, Patanjali, and HUL, now Emami also said that general sluggishness in demand across sectors, especially rural over the past few quarters restricted our growth for FY19 to single digit, Harsha V Agarwal, Director, Emami, said. Many industry experts have also acknowledged the consumer slowdown. However, with the expectation of a favourable monsoon and stable government, the slowdown will be temporary, many FMCG experts said.

Despite this, the company hopes for better sales in the current financial year FY20. Attributing this to innovation, strengthening of core brands and market development to meet the changing consumer needs, Harsha V Agarwal said that the outlook for the next fiscal remains positive.

However, not all has gone south for Emami. Emami s non-summer brands such as Kesh king, BoroPlus and Healthcare range recorded double-digit growth. The company also said that the key brands like Navratna, Zandu & Mentho Plus balms, Kesh King gained market shares.

Key takeaways

Emami has recorded net sales of Rs 635 crore at a 5% growth. In FY19, however, net sales stood at Rs 2,659 crore at the growth rate of 7%. The company also said that its Domestic business grew by merely 3% as the growth was muted because of lesser sales of its summer brands. While modern trade registered an encouraging growth of 33%, channel liquidity in the domestic market has been another speed breaker this quarter, said Mohan Goenka, Director, Emami Limited.