Emami shares hit 52-week low on acquiring Dermicool for Rs 432 crore

Emami shares hit a 52-week low of Rs 442.50, down 2% on the BSE in intra-day trade on Monday after the company announced the acquisition of Dermicool, one of the leading brands in the prickly heat powder and cool talc category, from Reckitt, for a purchase amount of Rs 432 crore, excluding taxes and duties. The stock dropped below its previous low of Rs 446, which was set on March 7, 2022.

Also Read| Sensex falls over 130 points while Nifty around 17,100 in early trade

The acquisition is being funded through internal accruals, according to the firm, and is subject to standard closing conditions.

Also Read| Stocks tank as Anil Ambani quits boards of group firms

The brand Dermicool is well-known for providing relief from prickly heat, and it has a strong customer connection due to its marketing campaign jingle, “Aaya Mausam Thande Thande Dermicool Ka.”

Also Read| PVR, INOX shares hit 52-weeks high after merger announcement

It controls around 20% of the market in the high growth, low penetration category. Combined with its Navratna Cool Talc, Emami will become a leader in this niche category, which would also help realise synergetic benefits and optimize costs, Emami said in a press release.

Also Read| Asia stocks dip, oil prices fall on Shanghai shutdown

The company’s stock has underperformed the market, plunging 23% in the last six months compared to a 5% drop in the S&P BSE Sensex. It was down 6% in the previous year, compared to a 16% growth in the benchmark index.

Also Read| Banking services may be disrupted due to nationwide strike on March 28-29

Emami reported a 5.05% rise in the December quarter net profit at Rs 219.52 crore as the company faced an increase in prices of key raw materials. The company had logged a profit of Rs 208.96 crore during October-December 2020-21, Emami said in a regulatory filing.

Also Read| Fuel prices: Petrol priced at Rs 99.41, diesel Rs 90.77 in Delhi on March 28, 2022

Revenue from operations was up at Rs 971.85 crore during the quarter under review as against Rs 933.61 crore in the year-ago period. Total expenses were at Rs 630.31 crore in the quarter under review as against Rs 593.42 crore.

Also Read| Trending Stocks: Reliance, Vedanta, PVR, M&M, Emami and others in news today

Its domestic business grew 3% year-on-year over a base of 16% growth in the previous year, translating into a two-year compound annual growth rate (CAGR) of 9%.