This article first appeared on GuruFocus .
Release Date: November 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Consolidated revenue grew 36% to INR 1,088 crores, with domestic sales up 49% driven by 43% volume growth.
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Strategic investments portfolio grew 73% on a like-to-like basis, contributing ~26% of domestic business, with Axiom and Brilaire more than doubling sales.
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Core brands performed well: skincare grew 31%, hair and scalp care grew 30%, and the 7 oils in one brand nearly doubled sales.
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EBITDA grew 25% to INR 222 crores and profit before tax grew 29% to INR 194 crores despite margin pressures.
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Organized channels now contribute 37% of domestic business, with QuickCom accounting for ~15% of digital sales, indicating successful channel transformation.
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International business returned to growth in October with high double-digit growth, and management expects the worst is behind.
Negative Points
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Gross margin declined by 520 basis points due to sharp input cost inflation and changing business mix from acquisitions.
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International business revenue declined 2% in Q2, impacted by floods in Nepal and supply chain challenges in Gulf markets.
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Profit after tax fell 3% to INR 144 crores due to normalization of effective tax rate after phasing out of fiscal benefits.
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Rural markets showed mixed performance, with some regions in south and west affected by drought-like conditions.
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A&P spends are expected to remain elevated at 18-19% of sales, limiting near-term margin expansion.
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Strategic investments are still in gestation phase and may not sustain 70% growth, with profitability yet to be established.
Q & A Highlights
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Q: With strategic investments growing 73% on a like-to-like basis and contributing ~26% of domestic business, is there scope to upgrade the ?750800 crore guidance for this portfolio? A: Dhruv Vajerwal, Chief Growth Officer, confirmed the company will do "800 plus this year for sure," and noted that on the current run rate the portfolio could reach almost ?1,0001,100 crore. He added that while 70% growth may not sustain, strong growth is expected across all four brands (Axiom, Brillare, Inknut and The Man Company), each driven by a different set of initiatives.
Q: Gross margin moderated ~520 bps this quarter. How much of this is input cost inflation versus business mix, and can it be recovered? A: Mohan Goenka, Vice Chairman, explained that of the ~550 bps impact, about 400 bps was purely raw material cost and the balance was mix-related following the acquired businesses' integration. He expects H2 to carry higher costs given current procurement prices, but anticipates benefiting from input cost corrections in the next year.
Q: What is the outlook for the core business in H2 FY27, given festive timing shifts and GST-related upstock/destock effects? A: Mohan Goenka guided that momentum is continuing and the business is expected to grow 18%20% in the second half of FY27.
Q: International business declined 2% in Q2. What is the current situation and when will growth turn positive? A: Vivek Deer, CEO, International Business, said the weakness was confined to a few geographiesNepal (floods) and Gulf markets (supply chain issues)while most other markets grew. He stated the "worst is behind us," with October delivering high double-digit growth and the business in green territory for the last three months. The movement of OTC pain management goods (sprays/aerosols classified as hazardous), ~2% of global business, remains curtailed out of India.
Q: Why is Emami's Middle East and Bangladesh performance different from peers like Dabur, which reported strong growth there? A: Vivek Deer, CEO, International Business, noted that Emami's geographic footprint differsit operates in disturbed geographies such as Russia, Ukraine and Iraq, with limited manufacturing locations (India, Bangladesh, UAE, Germany and toll manufacturing in Thailand). Iraq saw almost zero sales in Q2 due to logistics issues, though alternate routes via Port Kaba are now being used. Peers with manufacturing in the US, Africa and elsewhere do not face these constraints.
Q: What is the A&P spend trajectory over the next two years given the investment phase in new brands? A: Mohan Goenka said the company is in "spending mode" to capitalize on broad-based growth in the core portfolio, and will spend wherever opportunities exist. However, he guided that A&P should be taken at a maximum of 18%19% of sales for the full year.
Q: What price increases have been taken to offset inflation, and how is rural demand trending? A: Mohan Goenka stated price increases of ~5.5% have been taken for the full year, passing on cost increases to consumers. Rural performance has been mixedsouth and west markets with rainfall deficits and drought-like conditions underperformed, while many districts with good rainfall did well. With the winter peak season approaching, he expects things to pick up post-Diwali.
Q: What is the progress on the data analytics and AI platform announced earlier, and what impact is expected? A: Manish Gupta, President, Sales, said the initiative is on track and slightly ahead of schedule. The company is digitizing end-to-end processesfrom forecasting to fulfillment, supply chain, invoicing and distributor frontline bookingusing new technology and AI. Completion is expected next quarter, with real gains visible from April onwards; pilot markets have already shown impressive results.
Q: On the new launchesthe Boroplus baby care range and Kesh King Scalp Firsthow is Emami positioned versus entrenched players, and what is different this time? A: Mohan Goenka said the baby care range (a ?30,00040,000 crore market) is priced 25%50% cheaper than competitors, targeting mass-market consumers under the Ayurvedic Boroplus brand, launched first on e-commerce and modern trade. Kesh King Scalp First is a premium product priced ?500?1,000, leveraging Emami's strong e-com and quick-commerce relationships to take the brand up the premium ladder.
Q: Is Kesh King Scalp First backed by genuine product differentiation and R&D, beyond packaging and brand extension? A: Mohan Goenka emphasized heavy reliance on R&D, citing unique ingredients such as a detoxifying scalp formulation. He noted consumers are increasingly intelligent and read labels, which is why the product commands a significant premium and the ingredient story will be highlighted on digital platforms.
Q: How is the strategic investments portfolio performing on profitability, and which brands give the highest confidence? A: Dhruv Vajerwal, Chief Growth Officer, noted the portfolio is up 12% versus Q1 (which grew 61%), with confidence across all four brands driven by distinct leversreformulations, better product offerings and consumer-relevant marketing. The Man Company, previously stagnant, has moved to high-20s margins and grew over 30% this quarter. He cautioned that 70% growth may not sustain, but strong growth is expected across the board.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
