Emami confident of surpassing 15-17% growth guidance

Naresh Bhansali, CEO-Fin, strategy & business development & CFO, Emami is confident of surpassing their earlier growth guidance of 15-17 percent.

With the ramp-up in production of the recently launched products in the next fiscal, there would marked improvement in the finances of the company, he said.

According to Bhansali the company is actively looking for global and domestic acquisitions.

The company is all set to strengthen its Zandu Healthcare base and expand its brand portfolio in FY16. It would be looking at new launches to help increase consumer spending.

Brokerage house Motilal Oswal has a buy target on the stock with target price of Rs 1060 on back of overall volume growth of 11 percent. It expects the new product launches to contribute 5 percent to the company's revenues.

Below is the transcript of Naresh Bhansali's interview with Ekta Batra & Anuj Singhal on CNBC-TV18.

Anuj: There is quite a bit of emphasis on increasing your portfolio of brands in next financial year if you could take us through the strategy on that?

A: If you look at in the last year itself we introduced some of the mega new launches. We introduced HE range of products, where we started with HE deodorants first and then we launched the SHE sanitary napkins in the last quarter of the last financial year.

Apart from that we have had all these Fair & Handosme face wash, BoroPlus face wash, we had 7 Oils in One - all these products have faired very well in the last fiscal itself.

We expect to ramp-up these new launches in the next full financial year. There would be further new launches in healthcare sector in which last year we introduced this Zandu Ultra Balm which has also done exceedingly well. However, there could be further new launches in the healthcare sector going forward.

Ekta: What about your FY15 guidance? I believe that you would be inline to achieve this 16-18 percent FY15 sales growth guidance?

A: In the first 9 months we have grown by 21 percent cumulatively on the topline and on the bottom line also we have grown much more than we had earlier given as a guideline. We earlier had given a guidance of around 17-18 percent topline and the bottom line growth. We would be surpassing our guidelines which we had given in the last quarter itself.

Ekta: You are saying that your FY15 growth guidance will be better than the 15-17 percent?

A: It looks like.

Anuj: What about the Australian acquisition Fravin? Anything others on your radar right now?

A: You might have noticed that our balance sheet is financially so strong and our management bandwidth and our hunger for growth is also very high. We are always on the look out for acquisitions in India and abroad. We keep looking for new opportunities all across and we will continue to do that.

Ekta: If I look at your Q3 performance the management had said that your Navratna market share had risen substantially to 70.4 percent and even balms to 57.4 percent which is up around 140 basis points, Fair & Handosme, BoroPlus also maintained market share. Do you think that you have a strong enough position to possibly undertake price hikes at this point?

A: You rightly said our market share across all our power brands has increased substantially in the last quarter and also for the last nine months. There is lot of steam in this power brands and in this segment itself. So our price hikes would be limited to the extent of what kind of a strategy we have brand to brand may be just to compensate for input prices which we believe that input prices will now stabilize. So the price rise would be limited to take care of the inflation.

Ekta: What about your FY15 guidance? I believe that you would be inline to achieve this 16-18 percent FY15 sales growth guidance?

A: In the first 9 months we have grown by 21 percent cumulatively on the topline and on the bottom line also we have grown much more than we had earlier given as a guideline. We earlier had given a guidance of around 17-18 percent topline and the bottom line growth. We would be surpassing our guidelines which we had given in the last quarter itself.

Ekta: You are saying that your FY15 growth guidance will be better than the 15-17 percent?

A: It looks like.

Anuj: What about the Australian acquisition Fravin? Anything others on your radar right now?

A: You might have noticed that our balance sheet is financially so strong and our management bandwidth and our hunger for growth is also very high. We are always on the look out for acquisitions in India and abroad. We keep looking for new opportunities all across and we will continue to do that.

Ekta: If I look at your Q3 performance the management had said that your Navratna market share had risen substantially to 70.4 percent and even balms to 57.4 percent which is up around 140 basis points, Fair & Handosme, BoroPlus also maintained market share. Do you think that you have a strong enough position to possibly undertake price hikes at this point?

A: You rightly said our market share across all our power brands has increased substantially in the last quarter and also for the last nine months. There is lot of steam in this power brands and in this segment itself. So our price hikes would be limited to the extent of what kind of a strategy we have brand to brand may be just to compensate for input prices which we believe that input prices will now stabilize. So the price rise would be limited to take care of the inflation.

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