Emami Q1 result: Net profit falls 15% to ₹139 crore on higher input costs; revenue rises 15%

FMCG major Emami Ltd on Tuesday reported a 15% year-on-year decline in consolidated net profit for the first quarter ended June 30, as higher crude-linked input costs, inflationary pressures and disruptions arising from the West Asia conflict weighed on profitability.

The company's consolidated net profit stood at ₹138.94 crore in Q1FY27, compared with ₹164.26 crore in the corresponding quarter last year, according to a regulatory filing.

Despite the profit decline, consolidated revenue from operations rose nearly 15% to ₹1,039.21 crore during the quarter from ₹904.09 crore a year ago, driven by strong domestic demand. On a standalone basis, Emami posted a 12% increase in net profit to ₹182.22 crore, up from ₹163.09 crore in the year-ago period.

The company's domestic business grew 20% during the quarter. On a like-to-like basis, after adjusting for the previous year's Axiom Ayurveda and IncNut Digital numbers, domestic business growth stood at 12%, with volume growth of 8%.

Total expenses rose nearly 18% to ₹813.03 crore from ₹689.87 crore in the corresponding quarter last year, primarily on higher raw material costs, increased purchases of stock-in-trade and higher advertising and sales promotion expenditure.

Gross margin contracted 360 basis points to 65.8%, reflecting elevated crude-linked input costs and inflation in packaging materials and other key inputs. However, EBITDA increased 6% to Rs 226 crore, aided by cost optimisation initiatives and operational efficiencies.

India remained the key growth driver, with domestic revenue from operations rising about 20% to ₹911.96 crore. Revenue from international markets, however, declined nearly 10% to ₹127.25 crore.

The company said its international business fell 12% during the quarter due to disruptions caused by the West Asia conflict, which affected order execution.

Among product categories, hair and scalp care emerged as the strongest performer with 11% growth while skin care and health care registered growth of 3% and 2%, respectively.

Emami's strategic investments portfolio recorded 61% like-to-like growth and contributed around 18% of its domestic business during the quarter. Organised trade channels grew 19% and accounted for 32% of domestic business while quick commerce contributed 35% of e-commerce sales.

During the quarter, the company completed the acquisition of a controlling stake in Axiom Ayurveda Pvt Ltd by paying the first tranche of ₹100 crore towards acquiring the remaining 73.5% stake for a total consideration of up to ₹200 crore, effective April 1, 2026. It also acquired a 60% controlling stake in IncNut Digital Pvt Ltd for ₹320.99 crore, effective June 1, 2026.

Harsha V. Agarwal, Vice Chairman and Managing Director, said the company delivered a strong operational performance despite geopolitical disruptions, inflationary pressures and an uneven summer season. He said robust domestic growth reflected the strength of Emami's brands while the increasing contribution from strategic investments underscored the company's strategy of building multiple growth engines. Agarwal added that the company is increasingly integrating digital technologies and artificial intelligence across its operations to improve execution and drive long-term profitable growth.

Mohan Goenka, Vice Chairman and Whole-Time Director, said elevated input costs continued to pressure margins during the quarter. However, disciplined execution, cost optimisation and operational agility helped the company deliver EBITDA growth and a 4% increase in profit before tax to ₹195 crore. He added that Emami expects profitability to improve as input cost pressures moderate and its innovation pipeline gathers momentum.