Emami's domestic growth masks margin pressure and a 15.41% profit drop
Revenue grew 14.95% YoY, but higher input costs and a sharp rise in the tax rate weighed on earnings.
Filed 04 Aug 2026, 13:53 IST · Emami Ltd (EMAMILTD)
Key takeaways
- Consolidated revenue rose 14.95% YoY, but expenses grew 17.85%, cutting operating margin by 1.93 percentage points.
- Net profit fell 15.41% YoY as the tax rate rose 16.59 percentage points to 28.64%.
- Domestic business grew 20% while international sales declined 12% amid West Asia-related disruption.
Price around the results
Domestic demand offset international disruption
Emami's consolidated revenue grew 14.95% YoY, with management reporting 20% growth in the domestic business, including 8% volume growth. International sales declined 12% as West Asia disruption, supply-chain bottlenecks and inflation constrained order execution, the company said. Hair and Scalp Care grew 11%, while organised channels grew 19% on a like-to-like basis.
Input costs and tax drove the earnings squeeze
Expenses grew faster than revenue YoY, narrowing operating margin by 1.93 percentage points; management attributed the pressure to higher crude prices and inflation in packaging and other inputs. The company said gross margin contracted by 360 basis points to 65.8%. Interest expense rose 130.86% YoY, while the tax rate increased 16.59 percentage points to 28.64%, turning 4.25% PBT growth into a 15.41% decline in net profit. Other income accounted for 8.68% of PBT, so it did not drive the quarter's profit outcome.
Sequential margin recovery remains below last year's level
Quarter on quarter, revenue grew 12.33% while expenses rose 10.11%, lifting operating margin by 1.58 percentage points to 21.76%. This was a recovery from Q4FY26's 20.18%, but remained 1.93 percentage points below Q1FY26 and followed a fall from 33.36% in Q3FY26. Emami's margin was 5.62 percentage points above the 16.14% median for the 20 FMCG peers that had reported.
Management points to portfolio investment and channel change
Management said it expects Q2FY27 to benefit from demand across the portfolio and continued momentum in strategic investment businesses. It also said Emami remains confident of gradually regaining international momentum as market conditions stabilise. During the quarter, the company increased its stake in Axiom Ayurveda to make it wholly owned and acquired a majority stake in IncNut to expand its personalised beauty and personal-care presence.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,039 cr | ₹925 cr | +12.33% | +14.95% |
| Other income | ₹17 cr | ₹23 cr | -25.78% | -13.24% |
| Expenses | ₹813 cr | ₹738 cr | +10.11% | +17.85% |
| Operating profit | ₹226 cr | ₹187 cr | +21.15% | +5.58% |
| Operating margin (%) | 21.76% | 20.18% | — | — |
| Interest | ₹6 cr | ₹3 cr | +78.10% | +130.86% |
| Depreciation | ₹43 cr | ₹42 cr | +1.21% | -3.91% |
| Profit before tax | ₹195 cr | ₹164 cr | +18.67% | +4.25% |
| Tax | ₹56 cr | ₹21 cr | +166.84% | +147.76% |
| Net profit | ₹139 cr | ₹143 cr | -2.95% | -15.41% |
| EPS (₹) | ₹3.15 | ₹3.28 | -3.96% | -16.22% |
Operating margin of 21.76% compares with a Fast Moving Consumer Goods sector median of 16.14% across 20 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Domestic business grew 20%, with like-to-like growth of 12% and volume growth of 8%.
- Hair and Scalp Care delivered 11% growth during the quarter.
Guidance & outlook
- Q2FY27 is expected to benefit from healthy demand trends across the portfolio and continued momentum in strategic investment businesses.
- Emami remains confident of progressively regaining international momentum as market conditions stabilise.
- The company expects to deliver sustained and profitable growth through the remainder of FY27.
Planned next quarter
- Q2FY27 is expected to see healthy portfolio demand and continued momentum in strategic investment businesses.
Expansion
- Emami increased its stake in Axiom Ayurveda, making it a wholly owned subsidiary.
- Emami acquired a majority stake in IncNut to strengthen its personalised beauty and personal care presence.
New products
- International launches included Creme 21 face-care extensions, Navratna Tonic and Smart & Handsome beard care in GCC.
New initiatives
- Emami is embedding digital and AI capabilities across its value chain to improve execution and agility.
- The company strengthened international market fundamentals, pricing architecture and operational agility during the quarter.
- Emami continued its channel transformation, with organised channels growing 19% on a like-to-like basis.
Problems & risks
- West Asia conflict disruptions constrained the international business's ability to execute orders.
- Higher crude prices and inflation in packaging materials and other inputs increased costs.
- Gross margins contracted by 360 basis points to 65.8% because of higher input costs.
- International sales declined 12% because of West Asia conflict, supply-chain bottlenecks and inflationary pressures.
What to watch
- Whether operating margin moves back above the Q1FY26 level of 23.69%.
- Whether international sales recover after the reported 12% decline.
- Whether gross margin improves from 65.8% after the reported 360-basis-point contraction.