EMAMILTD - Investment Analysis: Buy Signal or Bull Trap?
Last Updated Time : 20 Dec 25, 07:05 am
Back to Investment ListInvestment Rating: 4.0
| Stock Code | EMAMILTD | Market Cap | 22,676 Cr. | Current Price | 520 ₹ | High / Low | 655 ₹ |
| Stock P/E | 27.9 | Book Value | 71.8 ₹ | Dividend Yield | 1.53 % | ROCE | 34.0 % |
| ROE | 31.5 % | Face Value | 1.00 ₹ | DMA 50 | 536 ₹ | DMA 200 | 569 ₹ |
| Chg in FII Hold | -0.96 % | Chg in DII Hold | 0.94 % | PAT Qtr | 182 Cr. | PAT Prev Qtr | 163 Cr. |
| RSI | 48.6 | MACD | 1.82 | Volume | 4,91,337 | Avg Vol 1Wk | 4,51,329 |
| Low price | 498 ₹ | High price | 655 ₹ | PEG Ratio | 35.3 | Debt to equity | 0.01 |
| 52w Index | 13.4 % | Qtr Profit Var | -14.8 % | EPS | 18.7 ₹ | Industry PE | 49.7 |
📊 Analysis: EMAMILTD demonstrates strong fundamentals with ROE at 31.5% and ROCE at 34.0%, both well above compounding thresholds. Debt-to-equity at 0.01 reflects a nearly debt-free balance sheet. EPS at 18.7 ₹ is consistent, and dividend yield at 1.53% provides decent shareholder returns. Valuation is attractive with P/E at 27.9 compared to industry average of 49.7, offering margin of safety. However, PEG ratio at 35.3 highlights stretched growth-adjusted valuation. Technicals show RSI at 48.6 (neutral), MACD positive (1.82), and price trading below both 50 DMA (536 ₹) and 200 DMA (569 ₹), indicating mild bearish sentiment. Quarterly PAT improved sequentially (163 Cr. to 182 Cr.) but YoY profit variance (-14.8%) raises caution.
💡 Entry Zone: Ideal entry would be in the 500–520 ₹ range, closer to valuation comfort and support levels. Current price (520 ₹) is at fair entry zone, making accumulation favorable for long-term investors.
📈 Exit Strategy: If already holding, maintain positions for long-term (3–5 years) given strong ROE/ROCE and attractive valuation. Consider partial profit booking near 630–650 ₹ resistance if valuations stretch further. Long-term holding is favorable due to strong fundamentals and sector resilience.
Positive
- 📌 Strong ROE (31.5%) and ROCE (34.0%) support compounding potential
- 📌 Debt-to-equity at 0.01 indicates robust balance sheet
- 📌 Dividend yield at 1.53% provides decent shareholder returns
- 📌 EPS at 18.7 ₹ reflects consistent profitability
Limitation
- ⚠️ PEG ratio at 35.3 highlights poor growth-adjusted valuation
- ⚠️ Quarterly profit variance (-14.8%) raises sustainability concerns
- ⚠️ Price trading below DMA levels signals weak sentiment
Company Negative News
- ❌ FII holding decreased (-0.96%)
- ❌ YoY profit decline despite sequential improvement
Company Positive News
- ✅ DII holding increased (+0.94%)
- ✅ PAT improved sequentially from 163 Cr. to 182 Cr.
Industry
- 🏦 Industry PE at 49.7, sector richly valued compared to EMAMILTD
- 🏦 FMCG sector benefiting from steady demand and brand strength
Conclusion
🔎 EMAMILTD is a strong candidate for long-term investment with excellent ROE/ROCE, debt-free balance sheet, and attractive valuation relative to industry peers. Entry near 500–520 ₹ offers margin of safety. Existing holders should maintain positions for 3–5 years, targeting exits near 630–650 ₹ if valuations stretch further. Long-term compounding potential remains favorable given sector resilience and strong fundamentals.
Would you like me to extend this into a peer benchmarking overlay comparing EMAMILTD against FMCG peers like Dabur, Marico, and HUL to highlight relative valuation comfort zones?
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