Emami’s 45 pc of top-line comes from acquired brands; says graduating from rural-focused company

New Delhi, Aug 4 (PTI) Home-grown FMCG firm Emami’s 45 per cent top-line in FY24 came from acquired brands, and non-seasonal brands contributed 56 per cent of its revenue, according to the latest annual report of the company.

Now Emami is graduating from being a seasonal and rural-focused company to a “perennial and universal” organisation and has been positioning itself by taking a consumer-centric approach, said Vice Chairman and Managing Director Harsha V Agarwal.

“This is evident in the fact that pain management, Fair and Handsome, Kesh King, and strategic investments generate non-seasonal revenues; the proportion of revenues derived from non-seasonal brands is a high 56 per cent today from 51 per cent in FY2019-20,” said Agarwal, addressing shareholders.

Besides, the proportion of revenues coming out of non-rural geographies has increased.

“The company’s effective positioning is consumer-centric (as opposed to product-centric), addressing challenges faced by consumers,” he said.

The emerging Emami is neither premium nor price-sensitive, Agarwal said, adding, “the evolved Emami is both”.

“Today, a new consumer class has emerged, needing to be serviced with low-priced packs, encouraged to make the use of Emami brands an extension of their daily lives and gradually move them to the premium. The combination of this entry-level approach and a premium positioning represents the Emami of the future,” he said.

This may come as a surprise to those who have seen Emami work in niche areas and command a premium in realisations.

“That worked well in India where the addressable market was relatively small,” he said.

Agarwal expects the consumer preferences in India will evolve, ready to opt for higher price points, helped by the rise in disposable income.

“Our optimism is derived from the fact that when a sizable proportion of the world’s largest population cluster moves into a higher income bracket — as has happened across the last decade — the consumer preferences of the past will evolve as well — in terms of categories, brands, and price points,” he said.

Emami is also enhancing the size of addressable markets by expanding channels. It is focused on distribution through new-age channels.

Now contribution of these new-age channels as well as modern trade and e-commerce to Emami’s domestic revenue has increased from 5 per cent to 22 per cent in five years, he said.

Emami, as part of its expansion plans, acquired several companies in past, converting itself from being an almost standalone brand into a multi-variant platform.

The company has succeeded in converting the acquired assets to its success story, contributing significantly to its top-line and bottom line, Agarwal added.

“The result is that around 45 per cent of our top-line today is generated from acquired brands, strengthening the perspective among consumers that Emami has everything we need,” he said.

The Kolkata-based company had in the past acquired firms such as Zandu over a decade-and-a-half ago, Kesh King in 2015, Creme 21 in 2019 and Dermicool in 2022.

“At Emami, we didn’t just take a call on what we had acquired; we also took a call on what we could do with the acquisition,” Agarwal said.

The company, which owns brands such as Navratna, Boro Plus, Kesh King and Fair And Handsome, is a “cash-rich and zero-debt” enhancing its capacity to invest in “acquisitions and entry into new categories” with moderated risk, he said.

Emami’s revenue in FY24 was at Rs 3,578.09 crore.