Emami eyes double-digit growth in FY25, explores inorganic opportunities

New Delhi: Home-grown FMCG major Emami is looking for double-digit growth in the current fiscal year and will keep exploring inorganic and strategic opportunities to enter into new product categories, its Chairman R S Goenka said.

Emami's focus will be to grow revenues with robust margins, generating adequate cash flows to reinvest in the business and strengthening sustainability, he said while addressing the AGM of the company.

The company remains "optimistic about future growth" supported by a favourable economic landscape, forecast of a normal monsoon, anticipated rural market recovery, government initiatives, and promising macroeconomic factors, contributing to a "confident outlook", Goenka added.

"We are committed to achieve double-digit growth in the new financial year," he said.

Besides, Emami which has made some acquisitions in the past -- AloFrut, Creme21 and Zandu, will continue to explore such growth opportunities allowing it to enter into a new segment and expand its play area.

"The company will keep exploring opportunities to invest in inorganic & strategic opportunities, enabling the company with new product categories that hold promising potential," said Goenka.

Earlier, Emami in its latest annual report had said that 45 per cent of its topline in FY24 came from acquired brands and the proportion of revenues coming out of non-rural geographies has increased.

According to Goenka, as a part of its inorganic growth strategy, Emami was among the first in India to invest in direct-to-consumer brands.

In FY24, it acquired a 26 per cent stake in Axiom Ayurveda entering the juice category through its brand AloFrut.

Through recent acquisitions, Emami is now present in five new-age categories - premium male grooming, premium and natural salon products, ayurvedic pet care, nutrition, and fruit juices.

"Two of these D2C acquisitions have already become subsidiaries and contributed more than 5 per cent to our FY2023-24 revenues," said Goenka.

Emami has launched more than 35 new products and variants in FY24 in the domestic business, primarily as digital-first launches on its direct-to-consumer (D2C) portal, Zanducare.

The company is also focusing on new-age channels such as e-commerce, direct-to-consumer (D2C) and modern trade formats and outlets.

"Emami’s domestic revenue contribution from organised channels increased from 12 per cent to 26 per cent in five years," he said.

In the June quarter, the country witnessed one of its hottest summers, which led to a healthy demand for summer products but dampened sales of non-summer products and out-of-home consumption.

"In the given macroeconomic context, your company reported a commendable performance in the first quarter posting a volume-led profitable growth," Goenka said, adding its overall revenues grew by 10 per cent at Rs 906 crore.

Emami's domestic business also grew by 10 per cent with a healthy volume growth of 8.7 per cent in the June quarter.

However, Goenka also cautioned about the increasing food inflation, which continued to impact discretionary consumption.

While talking about the FMCG industry, Goenka said it has grown at a 5-year CAGR of around 11 per cent in FY24.

The FMCG industry "is estimated to grow in strong double digits in the coming years on account of rising levels of disposable income, changing lifestyles, increased urbanisation and extensive research & development undertaken by key players" he said.

Goenka said personal care products are growing with various new and international brands entering the landscape – premiumisation and innovation being the buzzwords. The surge in e-commerce has significantly contributed to this growth story.