Emami Q2 revenue rises 36 per cent as profit dips marginally

MUMBAI: Emami’s revenue has put on a growth spurt, but its profits have not quite kept pace. The personal and healthcare major reported a 36.2 per cent year-on-year increase in consolidated revenue from operations to Rs 1,087.65 crore in the second quarter ended 30 September 2026, while profit after tax slipped 1.9 per cent to Rs 145.50 crore.

The company had posted revenue from operations of Rs 798.51 crore and profit after tax of Rs 148.35 crore in the corresponding quarter last year. Total income for Q2 FY27 rose to Rs 1,110.60 crore from Rs 819.88 crore.

The topline expansion came with a rise in expenditure. Consolidated expenses increased 39.6 per cent to Rs 865.33 crore from Rs 619.98 crore. The cost of materials consumed climbed to Rs 304.10 crore from Rs 200.48 crore, while purchases of stock-in-trade rose to Rs 131.08 crore from Rs 98.94 crore.

Advertisement and sales promotion expenditure increased to Rs 215.70 crore from Rs 156.39 crore. Employee benefits expense moved up to Rs 140.13 crore from Rs 121.22 crore, while other expenses rose to Rs 137.78 crore from Rs 111 crore. The company reported an inventory adjustment of Rs 63.46 crore, against an adjustment of Rs 68.05 crore in the year-ago quarter.

Earnings before finance costs, depreciation and amortisation, share of loss of associates, exceptional items and tax stood at Rs 245.27 crore, up from Rs 199.90 crore. Finance costs increased to Rs 6.08 crore from Rs 2.63 crore, while depreciation and amortisation expenses were broadly unchanged at Rs 45.29 crore against Rs 45.27 crore.

Profit before tax and exceptional items rose to Rs 193.62 crore from Rs 150.18 crore. However, the total tax expense jumped to Rs 48.12 crore from Rs 1.83 crore in the corresponding quarter, tempering the improvement in pre-tax earnings. The tax charge comprised current tax of Rs 41.08 crore, a deferred tax credit of Rs 4.78 crore and MAT credit utilisation of Rs 11.82 crore.

Profit attributable to the company’s equity shareholders stood at Rs 144.16 crore, compared with Rs 148.35 crore a year earlier. Basic and diluted earnings per share came in at Rs 3.30, against Rs 3.40 in Q2 FY26.

The six-month performance showed a similar divergence between revenue and the bottom line. Consolidated revenue from operations for the half year ended 30 September rose 24.9 per cent to Rs 2,126.86 crore from Rs 1,702.60 crore. Total income increased to Rs 2,168.31 crore from Rs 1,745.56 crore.

Expenses for the first half climbed to Rs 1,678.36 crore from Rs 1,309.85 crore. Earnings before finance costs, depreciation and amortisation, share of loss of associates, exceptional items and tax increased to Rs 489.95 crore from Rs 435.71 crore. After finance costs, depreciation and the share of losses from associates, profit before tax and exceptional items stood at Rs 388.33 crore, up from Rs 336.95 crore.

Despite the higher pre-tax figure, consolidated profit after tax declined to Rs 284.44 crore from Rs 312.61 crore. Profit attributable to equity shareholders was Rs 281.51 crore, compared with Rs 312.61 crore in the year-ago period. Earnings per share for the half year stood at Rs 6.45 against Rs 7.16.

The figures also reflect a larger business following two acquisitions. Emami’s consolidation of Axiom Ayurveda and IncNut Digital during FY27 has expanded the group’s reported revenue and asset base, but the company has cautioned that the current quarter and half-year results are not directly comparable with the previous year.

Emami held a 26.5 per cent stake in Axiom Ayurveda as at 31 March 2026. Under a share purchase agreement dated 1 April 2026, it acquired a controlling stake by paying the first tranche of Rs 100 crore towards an agreed consideration of Rs 200 crore for the acquisition of the remaining 73.5 per cent stake. Axiom became a subsidiary with effect from 1 April 2026, taking Emami’s aggregate holding to 63.25 per cent. The company has recorded a financial liability for the second tranche.

The second acquisition brought IncNut Digital into the group. Under a share subscription and purchase agreement dated 7 May 2026, Emami acquired a 60 per cent controlling stake in IncNut, on a fully diluted basis, for Rs 320.99 crore. IncNut became a subsidiary with effect from 1 June 2026. The remaining 40 per cent shareholding is to be acquired in subsequent tranches over the next four years, in line with the agreement. Emami has recorded a financial liability for the acquisition of the remaining stake at its fair value.

The fair value of assets and liabilities acquired in both transactions has been provisionally determined and accounted for under Ind AS 103, which governs business combinations. The consolidated results include Axiom’s financial impact from 1 April and IncNut’s from 1 June 2026.

On a standalone basis, Emami reported revenue from operations of Rs 698.20 crore in Q2 FY27, up 15.5 per cent from Rs 604.47 crore in the year-ago quarter. Total income rose to Rs 721.09 crore from Rs 658.32 crore.

Standalone expenses increased to Rs 503.01 crore from Rs 436.85 crore. The cost of materials consumed rose to Rs 228.41 crore from Rs 186.27 crore, while purchases of stock-in-trade increased to Rs 47.31 crore from Rs 37.23 crore. Employee benefits expense stood at Rs 96.98 crore, compared with Rs 91.09 crore. Advertisement and sales promotion spending was almost unchanged at Rs 93.60 crore against Rs 93.69 crore, while other expenses increased to Rs 90.58 crore from Rs 87.20 crore.

Standalone earnings before finance costs, depreciation and amortisation, exceptional items and tax came in at Rs 218.08 crore, compared with Rs 221.47 crore. After finance costs of Rs 1.58 crore and depreciation and amortisation of Rs 34.31 crore, profit before tax stood at Rs 182.19 crore, marginally higher than Rs 180.85 crore in Q2 FY26.

Standalone profit after tax, however, declined to Rs 136.46 crore from Rs 182.34 crore. The tax line moved from a credit of Rs 1.49 crore in the year-ago quarter to an expense of Rs 45.73 crore in the latest period. Basic and diluted earnings per share stood at Rs 3.13, against Rs 4.17.

For the first half, standalone revenue from operations rose to Rs 1,478.12 crore from Rs 1,360.93 crore, while total income increased to Rs 1,554.19 crore from Rs 1,435.69 crore. Expenses climbed to Rs 1,067.49 crore from Rs 992.74 crore. Profit before tax increased to Rs 415.79 crore from Rs 362.38 crore, but profit after tax fell to Rs 318.68 crore from Rs 345.43 crore. Earnings per share stood at Rs 7.30, compared with Rs 7.91.

The cash flow statement showed that the group generated net cash of Rs 266.77 crore from operating activities during the first half, up from Rs 235.49 crore in the corresponding period last year. Cash generated from operations before taxes was Rs 337.45 crore, compared with Rs 308.79 crore, while direct taxes paid stood at Rs 70.68 crore against Rs 73.30 crore.

Investing activities used net cash of Rs 79.84 crore, compared with an outflow of Rs 89.23 crore a year earlier. The figure included Rs 359.23 crore paid towards business combinations, net of cash and cash equivalents acquired. Purchases of current investments amounted to Rs 1,385.70 crore, while proceeds from their sale were Rs 1,721.86 crore. The group also spent Rs 20.91 crore on property, plant, equipment and intangible assets, and Rs 11.21 crore on alternative investment funds.

Financing activities saw a net cash outflow of Rs 317.92 crore, against Rs 180.11 crore in the year-ago period. This included Rs 207.33 crore towards the share buyback, repayment of short-term borrowings of Rs 76.16 crore, interest payments of Rs 12.54 crore and principal payments on lease liabilities of Rs 8.62 crore. Cash credit and working capital demand loan repayments amounted to Rs 10.82 crore.

After the impact of foreign exchange fluctuations, the group reported a net decrease of Rs 130.91 crore in cash and cash equivalents during the half year. Cash and cash equivalents stood at Rs 47.36 crore at 30 September 2026, compared with Rs 73.03 crore at the end of the corresponding period last year. The opening balance for the current half year was Rs 176.75 crore, with Rs 1.52 crore in cash and cash equivalents acquired through business combinations.

The balance sheet also reflects the acquisitions. Consolidated total assets stood at Rs 4,484.93 crore as at 30 September 2026, compared with Rs 3,836.44 crore at 31 March 2026. Goodwill increased to Rs 262.61 crore from Rs 68.19 crore, while other intangible assets rose to Rs 664.62 crore from Rs 206.81 crore. Property, plant and equipment stood at Rs 654.94 crore, compared with Rs 529.24 crore.

Total equity was Rs 2,923.81 crore, against Rs 2,922.44 crore at the end of March. Non-current liabilities increased to Rs 511.55 crore from Rs 75.76 crore, including other financial liabilities of Rs 219.30 crore against Rs 3.21 crore. Current liabilities stood at Rs 1,049.57 crore, compared with Rs 838.24 crore.

Emami’s share buyback, approved by the board on 17 September 2026, was completed on 9 October. The programme covered fully paid-up equity shares with a face value of Re 1 each, bought through the open market route at a maximum price of Rs 475 per share and for an aggregate amount not exceeding Rs 282 crore. The buyback was open to eligible shareholders other than promoters, the promoter group and persons in control of the company.

The company bought back 73 lakh equity shares for Rs 281.24 crore, excluding brokerage, transaction costs and taxes. Of these, 52.67 lakh shares had been bought back by 30 September, involving Rs 204.71 crore. All the shares repurchased were extinguished in October, according to the filing.

Shareholders are also in line for an interim dividend. The board declared a first interim dividend of Rs 5 per equity share of face value Re 1, equivalent to 500 per cent. The dividend covers 42.92 crore fully paid-up equity shares and will be paid on or before 4 December 2026. The record date has been fixed as 13 November 2026.

The company also disclosed the utilisation of accumulated minimum alternate tax credit. One of its manufacturing facilities in Assam had been eligible for income tax benefits under Section 80IE of the Income Tax Act until 31 March 2026. The accumulated MAT credit recognised as at 31 March stood at Rs 618.37 crore. Following the Finance Act, 2026, the credit remains available for utilisation against future tax liabilities under the new tax regime.

Emami utilised MAT credit of Rs 11.82 crore during the September quarter and Rs 25.27 crore during the half year. The balance stood at Rs 593.10 crore as at 30 September 2026.

Alongside the results, the board appointed Debendra Banthiya as company secretary and compliance officer with effect from 5 November 2026. Banthiya, an ICSI member with membership number F7790, has also been appointed the company’s nodal officer under the Investor Education and Protection Fund Authority rules.

Geographically, India continued to account for the bulk of the group’s revenue. Domestic revenue from operations was Rs 905.45 crore in Q2 FY27, compared with Rs 618.32 crore in the corresponding quarter last year. Revenue from outside India stood at Rs 182.20 crore, against Rs 180.19 crore.

For the first half, revenue within India reached Rs 1,817.41 crore, up from Rs 1,380.72 crore, while overseas revenue was Rs 309.45 crore, compared with Rs 321.88 crore. The geographical figures are based on customer location or destination. Non-current assets within India stood at Rs 1,671.76 crore as at 30 September, while those outside India were Rs 34.60 crore, taking the total to Rs 1,706.36 crore.

The consolidated results carried a qualified conclusion from statutory auditor S.R. Batliboi & Co. LLP. The qualification related to one subsidiary, including two of its subsidiaries, whose September-quarter financial information had not been reviewed by any auditor. The entities reported revenue of Rs 83.57 crore, net profit after tax of Rs 9.41 crore and total comprehensive income of Rs 9.46 crore for the quarter. The auditors said their conclusion in respect of these entities was based solely on unaudited information approved and furnished by the management, and they could not comment on the possible financial impact had the information been reviewed. The review report for the June quarter had also been qualified in connection with certain unreviewed components.

The auditors also noted that three other subsidiaries had been reviewed by their respective independent auditors. Their combined financial information reflected assets of Rs 185.80 crore, quarterly revenue of Rs 84.14 crore and net profit after tax of Rs 5.63 crore. Another subsidiary group, comprising one subsidiary and six of its subsidiaries, reported assets of Rs 256.78 crore, quarterly revenue of Rs 115.40 crore and net profit after tax of Rs 11.30 crore. A further subsidiary group, comprising one subsidiary and its subsidiary, reported assets of Rs 99.85 crore, quarterly revenue of Rs 65.99 crore and a net loss after tax of Rs 3.60 crore. These entities’ results had been reviewed by their respective auditors.

Two associates whose results had not been reviewed reported a combined share of net loss of Rs 34 lakh for the quarter and Rs 1.89 crore for the half year. The auditors said these associates were not material to the group. The standalone financial results, meanwhile, received an unmodified limited review conclusion.

Emami operates in a single business segment, personal and healthcare. Its September-quarter performance therefore brings together the impact of its core business, higher expenditure and the addition of Axiom and IncNut to the consolidated group. The acquisitions have given the revenue line a sizeable lift, but the decline in consolidated profit and the higher tax outgo show why the topline is only part of the story.