COVID-19 pandemic opens opportunities: Emami founders

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The ongoing adversity due to the coronavirus pandemic opens opportunities to increase stakeholder value and the company is sufficiently prepared to capitalize on sectoral opportunities. In their joint address to shareholders in the company’s annual report for 2019-20, they said COVID-19 aggravated what, until the start of the last financial year, was only a cyclical slowdown.

In the report, the farm sector slowdown affected rural consumption, the delayed winter affected the offtake of winter portfolio or products and the sluggish macroeconomic environment resulted in a decrease in consumer spending on discretionary products. This combination of factors affected the performance of the FMCG sector, which reported one of the slowest growth rates in years. This slowdown affected the performance of Emami Ltd as well.

Agarwal and Goenka said that the disruption may be temporary; the resilience is enduring. They believe that this ongoing adversity opens opportunities to enhance stakeholder value also. Emami is adequately prepared to capitalize on sectoral opportunities. The company’s power brands which could drive its sustainable growth. While the pandemic harmed every individual and organisations across the globe, it also presented opportunities that the Company was quick to capitalize on.

The company collaborated with delivery partners like Swiggy, Zomato and WOW Momo, to directly reach out to the consumers. Emami also recognised the importance of health & hygiene, which was the need of the hour and launched BoroPlus Advanced Anti-Germ Hand Sanitizer in April 2020, bringing an effective product to consumers amid the pandemic during the lockdown. This was followed by the launch of an Ayurvedic Sanitizer under the Zandu brand. The Company has also recently expanded BoroPlus range of hygiene products to Antiseptic & Moisturizing Soaps and Handwashes in two variants. In addition to these, the company has already lined up a slew of new launches in the health and hygiene category over the next few months.

In FY20, Revenues at Rs. 2655 cr marginally declined by 1% due to a 17% decline in Q4FY20. Tight cost control measures helped improve Gross margins by 130 bps at 67.0% and despite one-time write-off amounting to Rs. 11 crore, Cash profits of Rs. 639 crore grew by 2% during the year with margins growing by 80 bps

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