Citi lifts Emami stock target with buy rating By Investing.com

On Tuesday, Citi maintained its Buy rating on Emami Ltd (HMN:IN) and increased the price target to INR900.00, up from the previous INR650.00. The firm anticipates that Emami will experience an acceleration in revenue growth in FY25, driven by an increase in demand and the company’s strategic initiatives.

The positive outlook is partly attributed to expected near-term tailwinds, including a strong summer season that is likely to boost sales of Emami’s Navratna hair oils and Dermicool talc. Additionally, the possibility of above-normal monsoons is projected to drive an uptick in demand, particularly benefiting Emami’s pain management product portfolio.

Citi’s analysis suggests that Emami’s long-term growth will be supported by a series of strategic initiatives. These include efforts to increase sales within the existing network, the adoption of technology and digital tools, a focus on organized channels such as modern trade and e-commerce (with contributions exceeding 20%), the launch of new products, and investments in brand building, including higher advertising and promotion spend.

The firm expects that these strategies will yield positive results and lead to a re-rating of the stock, accompanied by accelerated earnings growth. Citi’s current coverage universe in the mid-cap consumer staples sector includes Buy ratings on both Honasa and Emami, indicating a positive outlook on these companies.

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