Emami spends Rs 183.69 crore on advertising in the first quarter of FY25

Emami boosted its advertising spend by 23.7% year-on-year as it spent Rs 151.87 crore in the same period last year.

The Board of Directors of Emami Limited met on August 1, 2024 to consider the unaudited financial results of the company for the first quarter ended June 30, 2024.

As the company celebrates its 50th anniversary commemorating five decades of delivering happiness to consumers worldwide, this milestone year has begun on a positive note.

In the given macroeconomic context, the company reported a commendable performance in the first quarter posting a volume led profitable growth. While, overall revenues at Rs 906 crore grew by 10%, domestic business also grew by 10% with a healthy volume growth of 8.7%. Modern trade, eCommerce, and institutional channels continued to post strong growth, while general trade also rebounded to positive territory.

Emami boosted its advertising spend by 23.7% year-on-year, reaching Rs 183.69 crore in the first quarter of FY25, compared to Rs 151.87 crore in the same period last year.

Quarter-on-quarter, Emami's ad expenditure saw a slight increase of 1.9%, rising from Rs 180.19 crore in Q4 FY24. For the entire last fiscal year, the company invested a total of Rs 652.20 crore in advertising.

The summer portfolio delivered strong growth, fuelled by the robust performances of Navratna Cool Talc and Dermicool. Healthcare range, 7 Oils in One, The Man Company, Brillare, and BoroPlus also performed well.

To strengthen the brand equity of Navratna, the company onboarded renowned comedian Kapil Sharma and his team for Navratna Cool Oil’s new campaign - “Thandak ka Badshah.” A new TV commercial featuring Shilpa Shetty and Palak Tiwari was also launched to drive awareness and consideration for Kesh King Shampoo.

Despite geopolitical crisis and currency depreciations in key geographies, International business grew by 11% in constant currency and by 10% in INR terms. The performance wasled by double digit growths in MENA and SAARC regions.

In Q1FY25, Gross margins at 67.7% expanded by 230 basis points. EBIDTA at Rs 216 crore grew strongly by 14%, despite strong investments behind brands which led to a 21% surge in A&P spends. Notably, Profit before tax at Rs 178 crore grew by 19% and Profit after tax at Rs 153 crore grew by 11%.

Harsha V Agarwal, vice chairman and managing director, Emami said, “I am very happy to announce a strong and profitable growth this quarter, highlighted by robust domestic volume growth of 8.7%, a befitting start to the new financial year as we celebrate our 50th Anniversary. Our summer portfolio performed exceptionally well, led by the stellar performances of our power brands, Navratna and Dermicool. Modern trade, eCommerce, and institutional channels continued to post strong growth in the Domestic business and our International Business also witnessed impressive growth of 11% in constant currency driven by the MENA and SAARC regions. As we move forward, we remain committed to delivering sustainable and profitable volume-led growth.”

Mohan Goenka, vice chairman and whole-time director, Emami added, "I am delighted to share that while our sales grew in double digits, our profits grew even faster with a 14% growth in EBITDA, despite 21% higher investments behind our brands. Our EBITDA margins also improved by 90 basis points. We continue to focus on our strategy to improve our distribution, invest aggressively in our key brands, and drive market share growth across our portfolio. With the forecast of a normal monsoon and the government's continued focus on macro-economic growth, we expect growth to accelerate in the coming months."