FMCG-maker Emami feels there is potential for double-digit sales growth for Dermicool, one of the leading brands in the Prickly Heat Powder and Cool Talc category, this summer season compared to last summer.
The company had acquired Dermicool from consumer giant Reckitt in March 2022 for a total consideration of ₹432 crore. After the acquisition, it became a market leader in the niche category with two major brands — Navratna Cool Talc, and Dermicool.
“It would be the second summer for Dermicool after we acquired the brand. Compared to the last summer season, we expect good growth from Dermicool this summer. There is a potential of a double-digit growth. Dermicool is part of our distribution now,” said NH Bhansali, CEO, Finance, Strategy and Business Development and CFO, Emami Ltd.
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During the last financial year, the company observed that South India and Maharashtra accounted for high Dermicool sales contribution, whereas for Navratna Cool Talc it was higher in North and East India. This helped it establish a foothold in the Prickly Heat Powder and Cooling Talc category across markets.
“We expect both Navratna Cool Talc and Dermicool to perform well since the summer is setting in,” said Bhansali.
The company expects to register good sales growth in the fourth quarter this fiscal, driven by an improved distribution, aggressive marketing and new product launches.
“We expect reasonable growth to come in during the last quarter of FY24. We expect the challenges, which were there in the third quarter, to reduce in the fourth quarter. And also we are putting in a lot of efforts to improving our distribution, the right kind of aggressive marketing and coming out with new launches in the DTC (direct-to-consumer) and in the mainstream as well. So, all these taken together, it would help us grow in Q4,” Bhansali told businessline.
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In the third quarter, the company faced challenges in terms of subdued rural demands and season disruption.
During Q3 FY24 the company’s revenue grew 1.38 per cent year-on-year at ₹996.32 crore, against ₹982.72 crore in the same period of FY23.
“In the third quarter around 65 per cent of our revenue comes from winter products. But the winter during this quarter was the warmest in the last few years. It impacted all the winter products. The best part is that despite this situation, our market share has remained intact. But the offtakes were impacted mainly because of the disrupted winter and also because of the pain in the rural market where the inflation continued,” the CEO pointed out.
Asked about outlook for rural demands, he said a demand uptick is not that visible in rural markets, but the company is hopeful going forward because a lot of initiatives, which the government took in the past, will start showing results. “We are optimistic that from the first half of the next fiscal the benefits will be more visible,” Bhansali added.
Emami reported an 11.88 per cent year-on-year growth in its consolidated net profit to Rs 260.65 crore for the third quarter this fiscal on the back of reduced input costs.