Hi, good afternoon everyone. It is my pleasure to host the management of Emami for their Q4 FY26 results concall.

I have with me from the management Mr. Mohan Goenka, Whole-Time Director and Vice Chairman; Mr.

Vivek Dhir, CEO - International Business; Mr. Dhruv Aggarwal, Chief Growth Officer; Mr.

Gulraj Bhatia, President - Healthcare; Mr. Manish Gupta, President - Sales; and Mr.

Rajesh Sharma, President - Finance and IR. I'll hand over the call to Mr.

Goenka for his initial remarks, and later we will open up for Q&A. Over to you, sir.

Yeah. Thank you, Percy.

A very good afternoon, ladies and gentlemen. Thank you for joining us today for Emami Limited Q4 and FY26 earning call.

I am pleased to share our results for the quarter and full year ended 31st March '26. I'm extremely pleased to share that Mr.

Dhruv Aggarwal has recently joined us as Chief Growth Officer, and is joining the concall today. In this role, he will lead the growth agenda across our investee companies, while also driving new investments and partnership opportunities.

Dhruv comes with over two decades of rich experience in growth strategy and transformation consulting, including 13 years at Bain & Company, where he was a partner in the consumer and retail practice. Now let me begin by setting the context for the quarter.

Q4 '26 presented a challenging operating environment. The onset of summer was significantly delayed, with inconsistent temperatures across some key markets.

Unseasonal rainfall further impacted category demand. Added to this was a high base from the previous year, and ongoing geopolitical headwinds in the Middle East effecting our international business.

In spite of these headwinds, I am pleased to share that the underlying momentum in our business remains firm, and we enter FY27 with confidence and clear strategic intent. Our domestic business, ex of summer portfolio, demonstrated healthy resilience, growing strongly in double digits at 11% in Q4 '26, reflecting the underlying strength of our core brand equity and our strategic efforts.

The summer portfolio was the principal drag, declining by 22%, with talcum powders alone declining by 40%. I would, however, like to highlight that we consciously reduced our receivables by over 100 crores during the year, a 10-days improvement in the working capital cycle as part of our ongoing focus on distributor hygiene and channel health.

On a consolidated basis, revenues for Q4 stood at 925 crores, reflecting a decline of 4% over the previous year. This decline was primarily driven by weak summer, rather than any structural or competitive weakness in our business.

Rest of the portfolio, like pain management, grew by 11%; Kesh King grew by 14%, delivering its second consecutive quarter of double-digit growth; healthcare range grew by 7%; strategic investments grew by an impressive 34%; and 7 Oils in One grew by 34%. BoroPlus, other than talc, grew by 4%; and male grooming range declined by 4%.

Our channel strategy continues to evolve positively. Trade pipelines remained healthy throughout Q4.

Organized channels remained strong momentum and further increased their salience to approximately 32% of our domestic business in this quarter. Wholesale channel dependency has reduced to 27% of total domestic sales, reflecting the structural improvement in our channel mix.

Quick-commerce continued to be a standout performer, posting an outstanding 70% growth, while GT marts also delivered a robust 25% growth. Our international business declined by 5% during the quarter, primarily due to geopolitical disruptions in the Middle East, which impacted shipping routes through the Strait of Hormuz, disrupted supply chains, increased freight costs, and affected operations across the GCC, Middle East, CIS, and South Asian markets.

On the financial front, I am pleased to report that our gross margins expanded to 68.4%, an improvement of 250 basis points over the previous year, reflecting our rigorous cost discipline and judicious pricing actions. EBITDA for the quarter, at 187 crores, declined by 15% due to operating deleverage, and despite which, we invested behind advertising and promotional spends, which grew by 12% in this quarter.

Profit after tax stood at 143 crores, a decline of 12%. For the full year FY26, revenues stood at 3,780 crores, a decline of 1%.

Gross margins, at 69.9%, expanded by 130 basis points. EBITDA came in at 964 crores, declined by 6%, and PAT stood at 775 crores, a decline of 4%.

While these numbers reflect the impact of challenging macro and seasonal environment we navigated through the year, we believe the resilience of our portfolio and strategic investments made during the year have strengthened our competitive positions meaningfully. We remain focused on strengthening our core brands, deepening our omnichannel capabilities, and continuing to innovate for the evolving Indian consumers.

With healthy margins and debt-free balance sheet, and a portfolio that spans both across essential and premium growth categories, we are well positioned to deliver sustained growth in FY27 and beyond. We look forward to sharing more with you as the year progresses.

Before we open the floor for Q&A, I would request Dhruv, who has joined as Chief Growth Officer, to share some plans on the recent acquisitions and strategic investments. Post Dhruv, I would also request Vivek to share challenges in the international market and how we plan to mitigate some of those.

Thank you so much. Over to you, Dhruv.

Good afternoon, everyone. Very happy to be part of the group and excited about the growth opportunities for our strategic investments and portfolio companies, with the support of the board.

We are present in this portfolio in exciting high gross margin businesses in high-growth categories and demand spaces, which have given us an opportunity to invest in brand building over the last few years. We're also building in the right high-growth channels, like quick-comm, which I think are still underpenetrated, advantage is both strategic and structural.

Quick overview on some of these companies. The Man Company is now witnessing healthy traction across key track categories.

We grew versus last year, and we've had strong growth in perfumes and non-pack loaders, and the business has benefited from sustained momentum across digital-first channels as well. The idea going forward across the portfolio is to sustain growth at 30% year on year while improving the bottom line as well.

Brillare, for instance, which has tea tree hair care, skin care products, brands like that, we expect them to grow much faster, and I think they're on the right trajectory. Last year, we were also able to drive absolute EBITDA improvement in this portfolio.

This year, the intent is to increase the absolute EBITDA, but about 18 crores. That strengthens our position and puts us in a clear path going forward.

Dhruv, sorry to interrupt. Your voice is not very clear.

Maybe the microphone is very close to your this thing.

Okay. This should be better now.

Go ahead.

That's what I wanted to cover. I've covered The Man Company and Brillare.

Anything on the new strategic investments like Axiom and IncNut?

Axiom, we're very excited about. I think it marks our foray into the fast-growing fruit juice category.

I do want to point out to everyone that Axiom is already a profitable entity, unlike many of the new-age startups, this is especially a value accretive addition to our portfolio, and we have significant plans for growth here itself. I think the headroom is extremely high.

Lastly, we've acquired IncNut, which consists of two brands. There is Vedix and there is SkinKraft.

Now, as consumer preferences increasingly shift towards efficacy and customization, the company basically is viewing personalized beauty as a significant long-term growth opportunity in India and globally. With this acquisition, we have presence in both of these businesses.

Again, the idea is that extremely high gross margins, very modest EBITDA losses, and so this reflects really continued investment in growth and customer acquisition. We have a very high long-term aspiration for this business over the next 5 years.

Okay. Thank you, Dhruv.

Vivek, would you want to share anything on the international front?

Sure, sir. Good evening, everyone.

Regarding international, as you are all aware, it's gone through a lot of stress in the month of March, in fact starting 28th February. Prior to that particular date, we were growing at a very decent pace, almost like double-digit growth in most of markets for us.

Starting 28th February, we got a big jolt in the month of March, where the entire Hormuz and supply chains were shut. Entire Middle East is dependent on supply chains from different parts of the world.

It's more like a transnational supply chain. We produce 50% of our goods within UAE, which are also dependent on raw material and packaging material requirements from different parts of the world.

30% of goods are imported from Europe, and another 20% are imported from India and other parts of Asia. That got impacted very badly in the month of March, but come April, we have been able to streamline quite a bit of the disruption of supply chains.

Despite cost going up and other things, come April, we have been able to resurrect, and we are almost like little 2% growth in the month of April. We are also expecting things to get stable in May and June as well.

From second quarter, we should be able to deliver good double-digit growths. Quarter one should also remain close to single-digit growth types only.

That is how the situation is.

Okay. Thank you so much, Vivek.

Now we can open the floor for Q&A, yeah.

Thanks. Abneesh Roy this side.

My first question is to Mohan ji. Sir, you sounded quite confident on FY27.

If you see Q4 commentary by every FMCG company, paint company, adhesive company, it has been quite positive, you are in sync with that. My specific question is El Nino generally summer categories do well, how do you see Q1, Q2 for Navratna, Dermicool taking into account there have been a few days of rain in many parts of the country?

Currently, Delhi is at 45° temperature, and most parts of North and East India are at a very high temperature. What would be your realistic growth outlook in this part of the business?

Second bit on legacy business is BoroPlus had a tough Q4, minus 8%, and a tough FY26, 2%. Generally, in an El Nino year, which is FY27, winter can be weak.

Given this unfavorable scenario, how do you see BoroPlus growth in FY27? Yes.

Abneesh, as far as the summer is concerned, we have seen delayed summers. You are right that some parts of the country, we are seeing amazing double-digit numbers.

Overall, we are very confident in the first half the summer brands definitely growing at double digits, both Navratna and Dermicool. We are very, very confident.

That's what we see as of now. I can't predict for BPSE for now.

Of course, it is on a lower base, so that will help, but how the season pans out, it is impossible for me to say anything. Summer is going strong, and you will see great numbers as far as summer is concerned.

Understood. My second question is to Dhruv.

Wanted to understand what made you join [laughter] Emami. I'm sure you would have a good reason, just want to understand that.

Second is when I saw Hari [laughter]

What made him join [laughter] Emami? No,

no, it's not from a negative connotation. Just want to understand.

You can ask him separately [laughter], maybe not on the call. [laughter]

I will ask that separately also. I wanted to understand if I see Marico, Tata Consumer, Pidilite, etc., Dhruv, they have almost 20-30% of the portfolio growing at explosive rate, which makes the entire company start with a high single-digit kind of a growth rate.

In your case, now if I see, new and mainstream portfolio is almost 21% of the business. Are you confident that at least this part of the business, it can grow every year say at 25-30%?

Now coming to IncNut, last few years, the sales has been stagnant. What is the reason, and what can change that?

I understand first year can be a bit easy, but what was the reason for stagnation last 3 years? Yeah.

I think the answer to the first and second question is pretty much the same. I think the portfolio, I'm pretty confident of growing this, like you said, 30% plus year on year.

It is largely because of the demand spaces we are in, plus I see the difference in the Q4 performance. I think we see that in the materials as well.

We've grown at a faster clip in Q4 compared to the rest of the year. The high gross margin basically gives us an opportunity to now continue to invest in marketing, while pull back in the form of efficiencies that we are delivering, and deliver a higher margin as well.

I feel I've looked at the businesses in detail, and I feel now pretty confident that each of these businesses has a way to grow. Specifically on IncNut, with your question on slow growth over the last few years, I think from a margin perspective, they've actually turned the trend completely, and that gives us the confidence because, yes, they did sacrifice growth, but with a much higher, much better margin.

We see some opportunities to immediately improve efficiencies in the business. I think our portfolio and the way we've derisked our portfolio has also helped.

The opportunity in specific spaces like international, like with Vedix, which is one of their core brands, I think there's a lot that can be done with the brand. That's why we are confident of this growth.

Understood. One last follow-up, and I'll end there.

Mohan ji, on Axiom, you have increased the stake. I understand that.

If you see from your entry into the company and now, would you be happy with the performance? The space has become very crowded.

Entry of Campa Cola has changed game of the entire space because ultimately everything customer sees as one set. I wanted to understand, is there a right to win for you in this part of the business given you are still small, and now the competition has changed dramatically?

Abneesh, this is not like a cola drink. It is aloe vera-based fruit drink, so that is absolutely differentiated product.

We are extremely hopeful, as Dhruv said, that this is a very profitable business for us. We almost do 40-45 crores of EBITDA in this business.

We have no reasons not to invest here more. Very few companies, beverages company, makes such kind of EBITDAs.

That will also change completely the investee company's outlook. We have some strong plans.

We have a new CEO who has joined in from Dabur, Dhruv, right? Who is driving this, yeah, who is driving

That's right. Shashi has joined in,

yeah. He was the head of Nepal business for Dabur.

He has joined as the CEO for the beverages company. We have some high talent who have just recently joined, Abneesh, huh?

Don't ask why he has joined. [laughter] They see great future in Emami, [laughter] so that's why they have joined.

[laughter]

Right. We had always wanted to build a great team, and seeing these people around, we are very confident that the investee companies have great future.

With great summer, I think going forward, you will see some great numbers. That's what I feel.

Sure, understood. Thanks a lot.

I'll connect again. Thank you.

Thank you.

Hello, can you hear me?

Yes. Sir, I had one question.

If I look at your hair oil portfolio, the two brands, Kesh King and 7 Oils in One, last two quarters, they've done really well. Whereas H1 was pretty weak for them.

I'm just trying to understand, has something changed for the whole industry, because when you look at companies dealing in the hair oil space, all of them have sort of reported good, strong numbers. I'm just trying to understand, could you spell out reasons for what has changed in the industry, because you also have actually changed your portfolio slightly.

I'm just trying to understand the reasons for the growth that we've seen in the last two quarters for yourself and the industry. Has something changed fundamentally, and we're seeing hair oil as a category come back into fashion, or what is happening really, unorganized to organized, GST rate cuts?

Could you just help us understand broadly what's happening in that space?

Shreyansh, what we understand, see, at least as far as we are concerned, both these brands were relooked by the BCG, and we have implemented that strategy. You are right, the overall portfolio has done well for most of the companies.

One of the reasons what we get to understand from the market that the unorganized trade, which because of this disruptions and costs going up, they have become unviable. That is one of the reasons why suddenly there is a spurt in organized hair oil businesses.

Coupled with our strategic moves given by BCG, that has also helped. We also see that momentum going on for 7 Oils in One, even Navratna and Kesh King in this quarter as well.

Unorganized has suffered quite a bit, because of costs, yeah.

Now that we're seeing copra prices falling off, do you see this trend kind of reversing, or we think that this market share gains should continue, and we all organized players should stand to benefit going forward as well?

I don't track copra prices very honestly because we don't use that.

Got it. My second last question is, sir, obviously, organized and new-age channels seem to grow really well for you.

I'm just trying to understand in terms of profitability, where are we versus GT or our traditional businesses? Obviously, we're kind of growing there, but are we actually operating at a lower margin versus our base business, or how should we look at this piece?

Shreyansh, we have improved significantly as far as this new channels are concerned. We had focused on our margins front.

Now we are quite close to our GT margins. Our total contribution from these channels are now almost 32%.

Which is quite healthy, and even the margins are very healthy now.

Any sort of category which tends to do well in the new-age channel, if you can call that out, or all product categories and all segments?

Most of the categories, most. 7 Oils has done exceedingly well, Kesh King, even skin creams.

We have introduced significantly large packs in these MT and e-com.

Got it, sir. Thank you, and all the best.

Thank you. A reminder to all participants, you may press star and one to ask a question.

Hi, sir. Just wanted to understand a little more on the ad spends this quarter.

They're at about 22-23% of sales. If you can give some idea as to how are these ad spends distributed across brands?

How many are for the core four or five brands that we have? How many are for the growth initiatives?

Given that some of these brands are fairly old and growing at sort of normal FMCG growth rates, if you look at BoroPlus, Navratna, etc., and those brands form a large part of our sales also, why is it that we need such high ad spends as a company compared to several other FMCG companies that we look at?

Percy, this particular quarter, the significant increase has happened in Brillare. They launched rosemary oil shots, and significant amount of budgets went there.

That's why you are seeing this disproportionate increase in advertising budgets. As far as our traditional companies are concerned, it is absolutely in line, rather it has come down a bit.

It is purely on investment on Brillare.

Got it. If I just look at the core brands, which is your Kesh King, Navratna, BoroPlus, and so on, those four or five main brands that you have, Smart and Handsome, etc.

If I look at the ad spend only of those core five or so brands as a percentage of sales, not for this quarter, I'm just talking about generally for the year as a whole, would that be close to about a 10%, and we are actually spending approximately half of our ad budget on some new initiatives, which right now are probably giving a single-digit or a low double-digit contribution to sales, but there's hope that they will actually grow much faster in future?

Yeah. If you see our total yearly budget, it is almost 20%, right?

19.6%. From our existing portfolio, the budgets would be roughly, I think, should be about 14% or so.

Yeah. Right?

From the investee companies, it should be about 6%.

Got it. Secondly, can you give some idea on your distribution initiatives?

What is your direct reach currently? How much you have grown this year, and what are your targets for the next 12 and 24 months?

Yeah. Percy, I'll hand over to Manish, who is the Head of Sales.

He is just going to share.

Hi. I think it's a continuation of a similar question in one of the previous quarters, where our network reaches out to, let's say, about 500,000 odd stores across urban and rural India.

We had completed, you will remember, a big project called Khoj for the expansion and closed that 2 years back.

Currently Manish, your voice is a little faint.

Hello. Can you hear me, Percy?

That's better.

Okay. Just to repeat, you'd remember that the company had taken a large initiative on Project Khoj a few couple of years back, which was closed, and we are currently reaching about 500,000 odd outlets between urban and rural India, and we have a very deep reach network reaching 100,000 odd towns as per census.

Currently, with the space we are investing in big time is in urban India on the GT marts and upgraded stores, premium stores, and all that, because that's where the new focus is. Otherwise, we are working towards improving the current reach with more lines and efficiencies and stuff built in.

Currently, as far as this year is concerned, that remains our focus, and that's producing results because we are addressing the premium portfolio and the premium customer.

How do we manage this growth in GT? Because see, if I take your overall growth and then in the last few years the non-GT portion, which is the e-commerce, quick commerce, modern trade, etc., has come up to 30% plus, which means that as a derivative GT is probably sort of marginally declining.

How do you sort of win in this kind of a situation where your distributor is sort of seeing that his sales is flat or maybe even marginally declining, etc.? How do you keep the trade happy?

Surely this is a fact of the country that the shopper behavior is changing, we have to honor that and play on the channel needs. You're right.

It's a large portion of our business anyway, especially in the consumer business that I am talking about from the domestic perspective. Our distributors, we are taking care, as Mohan ji said in his opening remarks, that we have been consciously keeping the distributor hygiene and channel health clean, maintaining the stock hygiene, maintaining the credit hygiene, because the game is, one, it's about the growth; second is about taking care of your partners in a clean, hygienic way on the return of investment for their perspective.

That's what we are working on, and that's what we continue to do. That's why these initiatives like mart stores and other things to grow their local business is only the urban and rural perspective.

We understand the growth part, but from a distributor stability perspective, I think we are in a very solid ground within the FMCG industry.

Right. I think I'll come back.

Alaric, can you just announce if anyone wants to be in the queue?

Hi. Good evening, team.

Just wanted to check on this talc impact for the year. If you could just highlight how much has been the impact for the year of the summer portfolio of the talc?

What is the share of that business now in fiscal year '26? That's the first question.

The second was that can we see some abnormality in that number again if the summer drives up again this year with almost 2 months done of the summer? Is that a likely outcome as well that you see another spike in growth as you saw in fiscal year '25?

Lastly, on this is that how is the margin structure for that category? Is it similar to what our average margins are?

Harit, if I exclude the talc portfolio, then our growth is around 5%. If we exclude the summer, then it is minus 16%, right?

Definitely, we are seeing some spurt in April and May for the summer brands. The margins, as far as the talc particular is concerned, it's a slightly lower margin compared to some of our other products that we have.

Got it, Mohan ji. Talc now as a percentage of the business for '26 is how large now?

Talc for the total business should be roughly at about 10%. Total revenue for talc would be about 400 crores.

300 crores, yeah. Total, yeah, if the revenue is 3,700 crores, the talc business is roughly 300 crores, yeah.

300 in FY26 which is much lower than what it was in '25.

We lost almost 100 crore of business in talc last year.

100 crores.

Before last year, it was 400 crores.

Got it. The other thing lastly was on profitability.

Assume we have a normalish kind of a summer, this year, not saying talc grows by 30-40% again, but just generally a normal kind of a summer this year, and obviously that some of your investments are generating positive EBITDA, especially on the D2C side, do you see this profitability piece coming back to that 26% to 27% range of consolidated EBITDA, the same way as you saw in '24 and '25? Is that the way to think about it?

Because as you're saying, the core portfolio ex-summer has been doing okay.

Yeah. Let's wait and see, Harit.

Still there is some pressure as far as the input costs are concerned, because you know how the crude is behaving, okay? We will have to just wait and watch.

Definitely, you would see some improvement as far as our margins are concerned. Got it.

One last thing, if I may, was the pricing that you put in in the last 1.5 to 2 months. Weighted average price increase or something you could help us with?

Yeah. It's around 3%.

Around 3%. Great.

Thank you. Wish you all the best.

Thank you. Thank you.

Thank you, all. Thank you, all the participants, for joining us today for our Q4 earnings call.

Thank you, IIFL, for arranging this. Thank you, Percy.

Have a good day.

Thank you. Bye-bye.