Powerfulpicks buy on dips call: Somehow due to the presence of other lucrative opportunities, I never mentioned to you about this script in my own portfolio:
EMAMI is one of the strongest players in the FMCG segment. CMP is around Rs 488. I hold this script from levels of Rs 335.
Q1 profits were stronger than ever at Rs 35 crores against Rs 15.5 crores in same quarter last year. Emami has growth potential and commitment in the skin care segment. They are seeing good growth in almost product categories (oil, Fair & Handsome, balm category) because of the ever growing rural demand. Top line growth of 20-22% in this financial year can be an easy target and we can expect their turnover to be around Rs 1260 crores. PE around 14.8, so script is not yet high priced. Using a Rs 300 crores QIP, they have repaid a significant chunk of their debt, which will be seen favorably by investors. In fact, by end of the financial year, they are aiming to bring the debt down to zero.
Navratna Oil, Boroplus Antiseptic, Navratna Cool Talc and Sonachandi Chyawanprash are their other brands.
Promoted by the Kolkata based Agrawal group, the company is known for its aggressive growth strategies. They took over Zandu strategically 2 years ago in a hostile take-over bid. They are actively looking at acquisitions in India and abroad, primarily in the Ayurvedic, personal and healthcare segments.
In fact, they acquired a manufacturing facility in Egypt recently, to produce all their brands, including Navratna and Boroplus and distributing them in Middle East and Africa. Emami has truly transformed itself into a global company.
Their 2 acquisition attempts in Turkey and UK failed but they are gearing up to buy out Ahmedabad-based unlisted firm Paras Pharmaceuticals Ltd. Paras Pharma, which has over-the-counter and personal care brands such as 'Moov', 'Krack', 'D Cold', 'Set Wet' among others, is up for grabs after two private equity firms (Actis and Sequoia) which hold a majority stake (70%) are reported to have shown interest in selling their stake for as much as $700 million. Paras has very well-establised brands in its portfolio and these brand's penetration levels are still low so if Emami can get paras, it will be a good acquisition.
My 9 month target for Emami is 582. One can buy on dips around 470-475. If you place an order in the system around these prices, you may get it.
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