Emami - Good Results

Emami FY07 PBT Up 44% On Strong Exports

Emami, one of the leading players in the personal and health care industry, reported a 44% growth in profit before tax (PBT) at Rs 74.5 crore for the year ended March 31, 2007 (FY07) as against Rs 51.6 crore in FY06.

The turnover for the company grew 27% at Rs 516 crore as compared to Rs 407 crore in FY06. Emami attributed this growth to its growing FMCG business and newer launches last financial year.

During the quarter, the company saw 39.91% rise in profit to Rs 221.90 million from Rs 158.60 million during the quarter ended March 2006.

Net sales for the quarter rose 54.24% to Rs 1,499.40 million from Rs 972.1 million during the corresponding quarter, a year ago.

Operating margins fell to 14.12% during the quarter, a fall of 24.17 basis points compared with the corresponding quarter, a year ago. Net margins, on the other hand, fell to 14.74% during the quarter from 16.24% in the same period last year.

The brands Navratna Oil and Boroplus Antiseptic Cream with market shares of 55.2% and 69.7% respectively, strengthened Emami's position further.

Mr Black & Mrs Black Hair Dye Powder and Malai Kesar Cold Cream were the most recent launches and accounted for 17% of turnover.

Emami's international business grew by 40%. This growth is from all 59 countries that it exports to, specially SAARC, Africa and Europe. Emami's new international range of products, Emita range, aimed at the masses in developing countries and the Gold range and Ayucare range, aimed at niche and premium markets, received excellent market response.

Emami - Foraying Into Retail Through Landmark

Emami Buys Landmark And Renames It Starmark

The Kolkata-based Emami Group strengthened its retail segment presence by buying out Chennai-based Landmark's stake in the Landmark Bookstore in Kolkata. Emami earlier held 50 per cent stake in the joint venture. The store has, however, been renamed Starmark, as the Landmark trademark is currently owned by Trent. Emami has plans of rolling out upto 10 stores in the eastern region over the next 18 months, along with express stores, maintaining the product line available at the Starmark store at present.

Christened Emami Retail Private Limited for the time being, the retail wing of Emami Group does not plan to increase the product line or include food or agro products in the basket. It plans to cater to the books and leisure products market as it does at present. "We have three store formats -- the large stores that are upto 20,000 squarefeet in area and sell the entire product line of books, stationery, gifts, toys and music. The big format stores, upto 10,000 square feet in area, have gifts and stationeries merged into one section. And then we have the express stores varying between 1,000 to 3,000 square feet in area and having a boutique feel about it with soft lighting, chairs and wooden furnishings," explained Gautam Jatia, chief executive officer, Starmark Store Limited. Jatia informed that that investment in setting up 10 large and big format stores in the various state capitals and major cities of the east would cost the company an estimated Rs 50 crore and above. This would include lease payment and inventory cost to set up the stores.

With each Starmark store bringing in an additional business of Rs 5 crore, the company hopes to clock a business of Rs 25 crore by March 2008 from Rs 10 crore currently. Analysts said the book retailing segment will become competitive as players like Reliance, Pantaloon (Depot) Crossword Oxford and Odyssey are expanding their network across the country. Books and music retailing constitutes around 7% of the Rs 40,000 crore retail sector today. According to estimates, the books segment is growing at 15% and music at 7% annually.

The company has already identified a 20,000 square feet space at the upcoming South City Mall in Kolkata and has also booked space at the City Centre mall in Salt Lake for setting up an express store. "We want to have a large format store in the residential area of Salt Lake, but haven't identified space yet. However, we have submitted our letter of intent for setting up a store in a mall being developed by the Diamond Group on VIP road," Jatia informed. The Emami Group will retain suppliers who have been supplying products to the Landmark Store in Kolkata so far. The roll-out plan for the rest of the country will follow once the eastern part of the country has Starmark stores in place, said Mohan Goenka of the Emami Group.

Emami - Rural Marketing

Emami Eyes Hinter Land

Emami Ltd is targeting the rural market to push sales of its Boroplus Antiseptic Cream. “Rural market contributes close to 45 per cent of our total Boroplus sale. So it makes sense for us to draft special advertising campaigns for this segment, especially during winters when the sale of creams automatically go up,” said H V Agarwal, director, Emami Boroplus. Emami’s rural marketing strategy was routed through over 2600 mobile traders and 130 small village shops covering states like West Bengal, Chhattisgarh, Madhya Pradesh, Andhra Pradesh, Orissa and Karnataka. It also sell goods in collaboration with ITC using its e-choupals, and the postal circle of Maharashtra.

"We will tie-up with more local distributors and also launch mobile campaigns in the rural market to push sales of Boroplus," informed Agarwal. ‘Melas’ are a regular part of the rural market. So, we would also participate at as many melas as possible to increase our brand visibility, “Agarwal added. Emami has a total advertising budget of close to Rs 10 crore for rural initiatives this year. The Rs 5 sachets (8gm) fetches a major chunk of overall sales as that pushes impulse purchase, informed Agarwal.

Boroplus, leads with a 66 per cent market share in India when the total antiseptic cream market is estimated at close to Rs 150 crore in India. Boroplus clocked sales of Rs 100 crore last fiscal and is targeting 20 per cent growth this year. The company also has plans to make Boroplus a global leader. Promotional campaigns are being planned at some 15 top international locations.