Emami eyes 45 per cent market share in prickly heat and cool talc category after acquiring Dermicool

Having acquired the prickly heat powder and cool talc brand Dermicool from Reckitt, Emami hopes to consolidate its position in the category and gain 45 per cent market share in the near term.

In a conference call with analysts on Tuesday, Mohan Goenka, director, Emami, said that brands operating in niche categories with high margins and low multinational presence are a very strong strategic fit for the company. Dermicool offers a great synergy for its existing business and even perfect strategic fit for growth in core categories.

Emami has acquired Dermicool for a total consideration of ₹432 crore excluding taxes and duties. The deal would be funded through internal accruals and is subject to customary closing conditions.

The prickly heat and cool talc category is estimated to be close to ₹760 crore and has been growing faster than the overall talcum powder category. The segment grew at a CAGR of nearly 12 per cent during 2016 to 2019; whereas talcum powder category grew at a CAGR of around five per cent, the company said in a presentation to analysts.

Though the category witnessed decline during Covid, it is expected to bounce back with double digit growth. Nearly 70 per cent of the sales are generated from rural markets.

Market share

Dermicool, which clocked net sales of ₹113 crore in CY2021, holds a 20 per cent market share in the high growth and low penetrated prickly heat and cool talc category.

“Dermicool offers a great synergy for our existing business and even perfect strategic fit for growth in core categories. It will strengthen our presence to make us the number one player in the prickly heat and cool talc category. We will leverage our distribution thereby optimising trade, consumer and media spends. It is not only present in a high growth and low penetrated category but it is also a highly profitable brand,” he said.

The brand has a direct reach of 1.25 lakh outlets and an indirect reach of around 1.8 million outlets.

Emami’s own brand Navratna Cool Talc is number two in the market while Dermicool comes third. There is a strong case for co-existence of Dermicool along with Emami’s existing brands, the company said in the presentation.

McKinsey & Co, which was roped in for commercial and diligence purposes, has advised on furthering the Dermicool brand whose product extensions will be launched after the brand regains its hold in the market, Goenka said. 

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