Emami, maker of brands such as Navratna hair oil and BoroPlus, on Monday reported a 29.7% year-on-year (YoY) decline in consolidated profit after tax (PAT) at ₹148.35 crore for the quarter ended September 2025 (Q2 FY26), compared to ₹210.99 crore in the same period last year.

The FMCG major’s quarterly performance was weighed down by muted demand—especially in its summer care portfolio—and temporary trade disruptions following GST reforms.

Revenue from operations stood at ₹798.51 crore, down 10% YoY from ₹890.59 crore in the corresponding quarter of the previous year. Domestic revenue contributed 77.5% of the total, amounting to ₹618.32 crore, while international markets accounted for ₹180.19 crore.

EBITDA for the quarter stood at ₹179 crore, declining by 29%, while gross margins remained stable at 71%, underscoring the company’s cost discipline and input price stability.

During the quarter under review, advertising, sales, and promotional expenditure increased to ₹156 crore from ₹146 crore in Q2 FY25. However, ad spend moderated sequentially from ₹179 crore in Q1 FY26 as the company adopted a more calibrated approach amid volatile consumption trends.

GST 2.0 reform impacts demand

According to the company, the September quarter was marked by a major policy shift — the government’s decision to reduce GST rates across key FMCG categories under the GST 2.0 reform. The move, aimed at enhancing affordability and stimulating consumption, led to temporary trade disruptions but is expected to structurally benefit companies like Emami.

“We are happy that over 90% of our core domestic portfolio now falls under the lowest GST rate of 5%, making our products more affordable and accessible to consumers. The quarter’s performance was a temporary impact of trade disruptions linked to the pending GST revision and a weak summer,” said Harsha V. Agarwal, Vice Chairman and Managing Director, Emami.

Nearly 88% of Emami’s core domestic portfolio benefited from the GST rate cut from 12% or 18% to 5%, taking total coverage under the 5% bracket to around 93%. The company passed on the benefits to consumers through price reductions of 7–13% across 293 products and 497 SKUs, underscoring its “consumer-first” commitment, it said in a release.

However, Emami’s summer portfolio—particularly talc and prickly heat products—faced a second consecutive challenging quarter due to excessive rainfall and a high base from last year, further weighing on sales momentum.

Emami said it remains optimistic about the medium-term outlook, citing the GST reform as a “landmark step” that will improve affordability and consumption across urban and rural markets, positioning the company for stronger growth in the coming quarters.

Board declares 400% interim dividend

Despite the earnings decline, the company’s board declared a 400% interim dividend of ₹4 per equity share (face value ₹1 each), fully paid up. The record date is November 14, 2025, to determine shareholder eligibility for the payout.

Following the Q2 results, shares of Emami ended 2.31% higher at ₹526, with a market capitalisation of ₹23,095.61 crore.

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