Emami expects margin squeeze to ease, aims at 11-12pc revenue growth in FY'23

PTI | Kolkata | Updated: 03-08-2022 17:37 IST | Created: 03-08-2022 17:37 IST
Emami expects margin squeeze to ease, aims at 11-12pc revenue growth in FY'23
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Kolkata-based FMCG major Emami Ltd expects margin squeeze to ease in the subsequent quarters of this fiscal due to correction in raw material prices, a top company official said.

It also aims at a 11-12 per cent on-year revenue growth during 2022-23.

During the first quarter ended June, gross margins of Emami contracted by 340 basis points due to inflationary pressures, and unfavorable portfolio mix owing to extraordinary high sales of its pain management range last year amid the COVID-19 pandemic.

''Considering the entire fiscal year, I don't think we should have an impact of more than 2 per cent as far as gross margin is concerned. We had a 3.40-per cent impact on margins in Q1 period of this year to 62.6 per cent,'' Director Mohan Goenka told PTI.

''Margin pressure will ease on account of two factors; the company will reap the benefit of easing inflationary pressures in the second half of the year, and product sales mix correction in the subsequent quarters will also have its reflection,'' he said.

Goenka said revenue growth during the first quarter was 18 per cent, but that will get adjusted going forward and for the full year, “we expect it to be at 11-12 per cent”.

''We expect revenue growth contribution of 4 per cent from the newly acquired Dermicool brand, and 7-8 per cent from existing product lines,'' he said.

Emami took over the Dermicool brand from Reckitt Benckiser in March for Rs 432 crore. Until July, the company had an arrangement with Reckitt Benckiser for distribution to avoid disruption in the transition period of acquisition.

Starting August, Emami will be managing Dermicool’s distribution.

''The ideal season for Dermicool will begin from February next year; so we have enough time to organise everything. We want to push the brand in a big way,'' Goenka said.

The company also has plans to leverage the brand into new product categories in future.

Talking about rural expansion under its project ‘Khoj’, Goenka said bulk of the expansion for this financial year will be in the second half.

''We were at 32,000-odd villages; we added 8,500 last year. Now, we have reached 41,000 villages. By the end of this year, we'll be close to 50,000 towns and villages,” he added.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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