EMAMILTD - Investment Analysis

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

Investment Rating: 3.4

🧴 Fundamental Analysis: Emami Ltd. (EMAMILTD)

Emami is a well-established FMCG company with a strong brand portfolio in personal care and healthcare. While its capital efficiency and balance sheet are excellent, the valuation and growth metrics raise concerns for long-term investors.

Metric Value Implication

P/E Ratio 30.5 Reasonable vs. industry PE of 59.2 — moderately undervalued

PEG Ratio 204 Extremely high — suggests poor earnings visibility or inflated valuation

ROCE / ROE 33.9% / 31.2% Excellent — strong capital efficiency

Dividend Yield 1.43% Decent — adds passive income

Debt-to-Equity 0.03 Very low — strong financial health

EPS ₹18.5 Solid earnings base

Qtr Profit Var +10.5% Mild growth — not robust

FII/DII Holding Change -0.22% / +0.38% Neutral sentiment — no strong institutional conviction

📉 Technical Analysis

Current Price: ₹561

DMA 50 / DMA 200: ₹582 / ₹599 → Bearish crossover; downtrend in place

RSI: 38.4 → Near oversold — potential for technical bounce

MACD: -2.26 → Bearish signal — short-term weakness

Volume: Below average — low conviction in current price action

💰 Ideal Entry Price Zone

₹520–₹550

This range offers a valuation cushion and aligns with oversold RSI and recent support levels

Avoid fresh entry above ₹580 unless earnings growth accelerates and PEG normalizes

📈 Long-Term Investment Outlook

Strengths

ROCE and ROE above 30% — excellent operational efficiency

Debt-light — strong balance sheet

Decent dividend yield — adds passive income

Strong brand portfolio — consumer stickiness

Risks

PEG > 200 — valuation far exceeds growth potential

RSI and MACD suggest short-term weakness

EPS growth is modest — not aligned with high PEG

FII trimming — lack of confidence in near-term performance

Emami is a quality FMCG brand with strong fundamentals but poor valuation comfort and weak price momentum. Suitable for long-term investors only if earnings growth revives and valuation moderates.

🏁 Exit Strategy / Holding Period

If you already hold EMAMILTD

Holding Period: 2–4 years — monitor earnings revival and margin expansion

Exit Strategy

Consider trimming near ₹700–₹750 if price rebounds and PEG remains elevated

Reassess if ROCE drops below 20% or profit growth stagnates

Hold if earnings growth improves and valuation becomes more reasonable

Would you like a comparison with peers like Dabur, Marico, or Godrej Consumer to explore better growth-to-valuation dynamics in the FMCG space?

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