Emami's Q4 margin slips as weak season weighs on revenue
Revenue fell 3.94% YoY as unfavourable summer conditions and West Asia disruptions offset 11% domestic growth outside the summer portfolio.
Filed 13 Jul 2026, 16:14 IST · after market close · Emami Ltd (EMAMILTD)
Key takeaways
- Emami's consolidated operating margin fell 2.61 percentage points YoY to 20.18% as revenue declined faster than expenses.
- Consolidated net profit declined 11.72% YoY to Rs 143.17 cr, despite the tax rate falling 3.54 percentage points to 12.74%.
- Other income contributed 13.88% of pre-tax profit, while the stock fell 6.93% five sessions after the results versus a 3.83% typical post-results move.
Price around the results
Seasonal weakness pulled down Q4 revenue
Consolidated revenue declined 3.94% YoY to Rs 925.1 cr, with management attributing the quarter's weakness to unfavourable seasonal conditions affecting the summer portfolio. The company said domestic business grew 11% excluding that portfolio, while international business declined 5% as West Asia disruptions affected shipping routes, supply chains and freight costs. Organised channels accounted for approximately 32% of domestic business.
Costs outpaced sales and compressed margin
Expenses fell only 0.70% YoY against the 3.94% revenue decline, so operating margin narrowed 2.61 percentage points to 20.18%. Management said gross margin expanded 250 basis points through cost management and operational efficiencies, but the reported operating margin still fell as revenue weakness weighed on operating leverage. Interest expense rose 13.31% YoY, adding to the pressure below operating profit.
Profit decline was softened by tax and other income
Net profit fell 11.72% YoY, less than the 15.30% decline in pre-tax profit because the tax rate dropped 3.54 percentage points to 12.74%. Other income rose 10.70% and represented 13.88% of pre-tax profit, making it a meaningful contributor to reported earnings. Sequentially, the tax rate rose 5.33 percentage points and operating margin fell 13.18 percentage points from Q3FY26, reversing the prior quarter's seasonal peak.
Management points to brand investment and portfolio expansion
Management said it increased investments behind its brands by 12% and that early Q1FY27 trends were encouraging, particularly in the summer portfolio, supported by expanded distribution, focused media investment and stronger trade activation. The company said it expects business momentum to improve progressively and expects international markets to normalise gradually as geopolitical conditions stabilise. Emami also said it had made Axiom Ayurveda a subsidiary and was acquiring a majority stake in IncNut to expand its personalised beauty and personal care presence.
Post-results fall was larger than Emami's usual follow-through
The stock fell 3.07% on the reaction day and 6.93% after five sessions, with trading volume at 5.29 times the reference level. Its immediate decline was close to the historical typical absolute move of 3.83%, but the five-session fall was larger; across the last eight results, the stock rose after six and fell after two.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹925 cr | ₹1,152 cr | -19.68% | -3.94% |
| Other income | ₹23 cr | ₹9 cr | +150.50% | +10.70% |
| Expenses | ₹738 cr | ₹768 cr | -3.81% | -0.70% |
| Operating profit | ₹187 cr | ₹384 cr | -51.41% | -14.92% |
| Operating margin (%) | 20.18% | 33.36% | — | — |
| Interest | ₹3 cr | ₹3 cr | +7.88% | +13.31% |
| Depreciation | ₹42 cr | ₹45 cr | -6.77% | -2.94% |
| Profit before tax | ₹164 cr | ₹345 cr | -52.45% | -15.30% |
| Tax | ₹21 cr | ₹26 cr | -18.26% | -33.71% |
| Net profit | ₹143 cr | ₹319 cr | -55.19% | -11.72% |
| EPS (₹) | ₹3.28 | ₹7.32 | -55.19% | -11.83% |
Operating margin of 20.18% compares with a Fast Moving Consumer Goods sector median of 16.75% across 26 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -3.07% | -3.05% |
| Next session | -6.04% | — |
| 5 sessions | -6.93% | -6.46% |
| 15 sessions | -8.86% | — |
| 30 sessions | -2.81% | — |
Volume on the results session was 5.29× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Excluding the summer portfolio, domestic business grew 11% during Q4FY26.
- Organised channels contributed approximately 32% of domestic business during the quarter.
- The company delivered 250 basis points of gross margin expansion through cost management and operational efficiencies.
Guidance & outlook
- Emami expects business momentum to improve progressively in the coming quarters.
- The company expects gradual normalization as the geopolitical situation stabilises.
- Emami said early Q1FY27 trends were encouraging, particularly across the summer portfolio.
- Emami remains confident in delivering sustained profitable growth.
Planned next quarter
- Q1FY27 summer portfolio performance is being supported by expanded distribution, focused media investments and stronger trade activation.
Expansion
- Emami increased its stake in Axiom Ayurveda, making it a subsidiary, with the remaining stake to be acquired by June 2026.
- Emami is acquiring a majority stake in IncNut to strengthen its personalised beauty and personal care presence.
New initiatives
- Emami increased investments behind its brands by 12% to support future growth.
Problems & risks
- The quarter was affected by unfavourable seasonal conditions impacting the summer portfolio.
- Geopolitical disruptions in West Asia affected the international business and increased freight costs.
- The company faced a muted demand environment during the quarter.
What to watch
- Whether operating margin recovers from 20.18% after the Q4 seasonal disruption.
- Whether domestic growth excluding the summer portfolio remains above 11%.
- Whether other income stays near 13.88% of pre-tax profit, or reported earnings become less reliant on it.