EMAMILTD - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.7

🧴 Core Financials Overview

Profitability

EPS: ₹18.5 ➜ moderate earnings capacity for an FMCG player

PAT decline: ₹279 Cr to ₹162 Cr ➜ significant drop ➜ profit volatility concerns

Returns

ROE: 31.2% | ROCE: 33.9% ➜ excellent capital efficiency ➜ strong operational execution

Leverage & Dividend

Debt-to-equity: 0.03 ➜ almost debt-free ➜ financially stable

Dividend Yield: 1.43% ➜ attractive yield for income-focused investors

📌 Insight: Despite earnings contraction, return metrics and balance sheet remain solid.

📊 Valuation Breakdown

Metric Value Commentary

P/E Ratio 30.5 below industry PE (59.2) ➜ relatively undervalued

P/B Ratio ~9.09 (₹561 / ₹61.7) ➜ premium ➜ reflects brand strength and asset-light model

PEG Ratio 204 extremely high ➜ distorted due to shrinking profits

📉 Verdict: Valuation appears unattractive ➜ high PEG indicates overpriced vs growth prospects

🧪 Business Model & Strategic Edge

FMCG player with brands in personal care, healthcare, and ayurveda

Dominant presence in niche categories (e.g., cooling oils, balms, herbal skincare)

Moats

Brand loyalty in rural and semi-urban India

Strong distribution network across Tier 2/3 regions

Low capex intensity ➜ scalable operating model

📌 Challenges

Seasonality (summer demand swings for key products)

Competitive pressure from Dabur, Himalaya, and new-age wellness startups

Volatility in quarterly earnings due to high margin dependency

📉 Technical Signals

RSI: 38.4 ➜ nearing oversold ➜ potential bounce setup

MACD: -2.26 ➜ weak momentum ➜ trend reversal unclear

Price below DMA 50 & 200 ➜ short-term downtrend ➜ consolidation phase

✅ Suggested Entry Zone: ₹520–₹540 🧊 Wait for MACD crossover or volume spike for confirmation

🧭 Long-Term Investment View

Suited for investors with

High risk tolerance for FMCG volatility

Interest in rural demand cycles & ayurvedic trends

Faith in brand turnaround and portfolio diversification

🔍 Monitor

Volume traction in flagship SKUs (e.g. Navratna, Zandu)

Ad-spend allocation and digital channel sales

Margin trends and inventory cycle improvements

Want a showdown with peers like Dabur or Marico on return ratios, distribution reach, or ad-spend effectiveness? I can spin up a heatmap that cuts through the clutter.

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