Emami reports 9% rise in net profit for Q1 FY26; gross margins see improvement despite soft consumer demand

Emami Ltd. has reported a 9% year-on-year increase in consolidated net profit to ₹164 crore for Q1FY26 on the back of a sustained growth in the core domestic business, supported by strong performance in categories such as the Pain Management range and BoroPlus Antiseptic creams.

While the overall topline was flat, growing at 6% from last year, the Talc/Prickly Heat Powder or PHP segment, which is highly seasonal and dependent on summer sales, declined 17% year-on-year due to unseasonal rains and an early monsoon.

This drop, however, comes on a high base of 54% growth in Q1FY25, and the category still maintained a strong 13% two-year CAGR. For the full summer season (January to June 2025), the segment posted flat growth.

“The quarter witnessed persistent pressure on urban discretionary consumption, while rural demand displayed signs of recovery. However, an unusually soft and shortened summer, caused by unseasonal rainfall and the early arrival of the monsoon, negatively impacted consumption across the company's summer-centric portfolio,” the company said in a statement.

On the profitability front, Emami saw its gross margins expand by 170 basis points to 69.4%, driven by benign input costs and improved cost efficiencies. EBITDA stood at ₹214 crore.

With a strong focus on a digital-first approach, Emami launched new products exclusively on the Zanducare platform. The company’s international business saw modest growth despite challenges in key markets like Bangladesh, the Middle East, and Africa.

“We are pleased with the strong momentum in our organised channels—Quick commerce, in particular, scaled nearly 3x year-on-year, affirming the success of our omnichannel approach. Despite a flattish topline, we delivered a 9% growth in Profit After Tax, underscoring our sharp focus on profitability and operational efficiency. As macro conditions begin to improve with a strong monsoon and easing inflation, we are confident that consumer demand will gradually strengthen,” said Mohan Goenka, Vice Chairman and Whole-Time Director, Emami Limited in a statement.

The company remains optimistic about gradual macroeconomic recovery, supported by a strong monsoon, stabilising inflation, and improving consumption. With its focus on innovation, digital-first strategy, distribution expansion, and cost agility, Emami expects to sustain profitable growth in the upcoming quarters.

“Our performance this quarter reflects the underlying strength and resilience of our brands, even in the face of an unusually subdued summer. Our Talc/PHP category maintained a 2-year CAGR of 13%. Our flagship brands are being future-proofed; Kesh King is undergoing a strategic transformation to enhance long-term relevance, while Smart & Handsome is expanding into adjacent male grooming categories. Looking ahead, we are optimistic about growth in the coming months, driven by strong monsoon conditions, easing inflation, and potential interest rate reductions. These factors are expected to support a recovery in consumption and strengthen overall economic momentum,” said Harsha V Agarwal, Vice Chairman and Managing Director, Emami Limited in a statement.

Emami shares closed at ₹599, up 5.96% from the previous close of ₹565.30 on the NSE on Thursday.