Emami Stock Hits 52-Week High Amidst Analyst Optimism

Emami Stock Hits 52-Week High Amidst Analyst Optimism

VoM News Desk | January 1, 2024 | 11:24 AM IST | Breaking News | Follow on Google News

Emami Stock Hits 52-Week High Amidst Analyst Optimism/Mint

Emami Stock Hits 52-Week High Amidst Analyst Optimism

Emami’s share price surged over 4% to reach a 52-week peak on the BSE, continuing a strong upward trend witnessed over the past week. The stock soared by 16% within this period, primarily driven by appealing valuations, as stated by analysts.

Emkay Global Financial Services reiterated its positive outlook on Emami, maintaining a ‘Buy’ rating and a target price of ₹625 per share based on a 31x P/E ratio, in line with the company’s average forward P/E over the last decade. This projection suggests a potential upside of 10.7% from the previous closing price. The endorsement is supported by Emami’s intensified focus and strategic hiring to address a wider spectrum of consumer needs.

Addressing concerns related to share pledges, the promoter group is actively resolving these issues and experiencing an expansion in shareholding through buybacks.

Emkay Global highlighted Emami’s significant rural revenue (constituting around 52% of its revenue), which enhances stability in top-line growth and positions the company advantageously for rural demand recovery, though seasonal variations remain a risk factor.

The brokerage remains optimistic about Emami’s management guidance, foreseeing mid-to-high single-digit growth across its Indian segments in the medium term. Despite a projected subdued performance in Q3FY24 due to weak seasonality and a slowdown in rural demand, Emkay Global sees any weakness in the stock as an ‘entry’ opportunity.

In the near term, the brokerage anticipates low single-digit growth in the domestic business due to weak winter demand, while the international business is expected to maintain double-digit growth momentum. Modest YoY EBITDA margin expansion is foreseen, attributed to restrained top-line growth and an expected increase in advertising and promotional spending.

As of 11:00 am, Emami shares were trading 1.36% higher at ₹571.85 apiece on the BSE.

VoM News Desk

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.