Emami Q2 FY27 Results (NSE: EMAMILTD)
Signal: Margin pressure
The read
The trajectory improved sharply on demand and portfolio breadth: consolidated revenue grew 36.2% and domestic volume 43%, with Strategic Investments up 73% like-for-like. However, this is not yet a clean earnings inflection because gross margin contracted 520bps to 65.8%, EBITDA margin fell 200bps to 20.4%, and tax normalisation turned 28.9% PBT growth into a 2.7% decline in profit for the period.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,087.7 Cr | +36.2% | N/A |
| EBIT | ₹177 Cr | +32.8% | |
| Net profit | ₹144.4 Cr | -2.7% | |
| EBIT margin | 20.4% |
P&L walk
Revenue grew 36.2% YoY on 43% domestic volume growth and acquisitions, but materials cost rose 60.7% and gross margin compressed 520bps; disciplined staff-cost growth and productivity moderated EBITDA-margin contraction to 200bps, while tax normalisation reduced profit for the period 2.7%.
Segments
No formal segment-results table was disclosed; within the business split, Strategic Investments grew 73% like-for-like and reached 26% of domestic business, while International Business declined 2% on reported revenue.
Key positives
- Domestic Business revenue grew 49% with 43% volume growth, indicating that Q2 growth was primarily volume-led rather than only price-led.
- Strategic Investments grew 73% like-for-like and contributed 26% of domestic business, materially broadening the growth engine beyond the core portfolio.
- EBITDA still grew 24.5% to ₹222.3 crore despite a 520bps gross-margin compression, helped by staff cost growth of 15.6% versus revenue growth of 36.2% and productivity initiatives.
- Skin Care grew 31% and Hair and Scalp Care 30%, showing broad-based momentum across core consumer categories.
Key concerns
- Gross margin compressed 520bps to 65.8% as materials cost rose to 34.2% of revenue from 29.0%; elevated input costs remain the dominant operating risk.
- EBITDA margin fell 200bps to 20.4% despite 36.2% revenue growth, showing that pricing and productivity actions did not fully offset input-cost inflation.
- Profit for the period declined 2.7% to ₹144.4 crore because tax expense increased to ₹48.1 crore from ₹1.8 crore as the effective tax rate normalised.
- International Business revenue declined 2% on reported figures because of Nepal floods, Iraq and supply disruptions, although underlying growth excluding Nepal and Iraq was 6%.
Research and educational content only. Not investment advice.