Emami Company is one of famous FMCG Company in India. Emami acquired Zandu Pharmaceutical Works Ltd for Rs.730 cores. The company demerged Zandu FMCG into Emami and raised Rs.310 cr through QIP. The company became debt free within 2 years of the Zandu deal. The company's health products unit offers tonics for colds and coughs as well as nutraceuticals.
Company product:
1. BoroPlus
2. Navratna
3. Fair and Handsome
4. Zandu balm
5. Kesh King
6. Mentho Plus balm
7. Fast relief
• Emami’s top brands like BoroPlus Antiseptic Cream and Navratna Cool Talc grew handsomely last year. Even newly launched products like the HE range nearly doubled sales, Emami 7 Oils in One grew by 46%.
• The chairman of company said its plans to expand its direct reach to eight lakh outlets this fiscal to reduce dependence on wholesale channel.
• The company focus on middle-east Asia and increased its efforts in south Asia, particularly Bangladesh, which accounts for nearly 35 per cent of the total international sales.
• The chairman said Emami plans to venture into newer global markets. We have registered our products in Nigeria and Ghana with an intent to launch them during the current year. We will also launch more products in Bangladesh.
Fundamental Analysis
Emami Ltd, the flagship company of the Group, is a leading player in the personal and healthcare consumer products industry in India. The company is engaged in manufacturing and marketing of health, beauty and personal care products that are based entirely on ayurvedic formulation. The company has over 30 brands under their portfolio. The company has market capitalization of 28574.09. The companys product categories consists hair care, skin creams, soaps and lotions, talcum powder and ayurvedic healthcare products
• The Company has a good return on equity (ROE) track record: 3 Years ROE 32.56%
• The Company has been maintaining a healthy dividend payout of 40.10%
• The Company has reduced debt.
• The company plan to set up 200 to 300 mega watt power plant in Ethiopia with an investment of Rs 10 billion Rs 15 billion and the plant could be a hydro or a thermal power plant.
• The company plans to set up a new newsprint facility at Orissa at an investment of Rs 5 billion and will be set up by Emami Paper Mills Ltd, a group firm.
Technical Analysis
Emami Ltd. formed long term symmetric triangle pattern on weekly chart it started from May 2015. At the end of the last week it gave break out of the pattern and gains nearly 8 percent. Broadly the stock was consolidated in a range between 900-1200 over the past two years and was awaiting a break out of the consolidation range.
• It gave break out of the triangle pattern as well as breaks psychological level of 1200, and posed a weekly closing above 1200.
• Inside this long term triangle pattern a short term triangle also formed on daily chart, which also gave break out.
• It also holds a support of harmonic EMA of 127 days.
• RSI is still not overbought and is near 65, if it enters above 70 a sharp momentum is expected towards north.
• 1365 is the stock’s Life-Time high level and expected to break in a week or two
• 1260 is a weekly resistance and break out is confirmed above this level
• 1060 is a key support level for the stock and works as a stop loss
Buy Emami Ltd. above 1260 or risky traders can buy from current levels and add more above 1260, the target would be 1365 and if gives weekly closing above 1365 then it may reach 1500 in couple of weeks.