Emami Ltd – Initiating Coverage – Rating BUY: GEPL Capital

Tagged: Emami, GEPL Capital

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July 1, 2014 at 9:48 pm #653

Vidhi Khanna
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Valuation

At the CMP of Rs.510.65, Emami Ltd is trading at 11.48x its FY17E EPS of Rs.44.48. This is at 45% discount to its peers that are trading in the range of 14x to 28x their FY17E EPS. This is justified as the company operates in the niche market segment, is still in the investment stage & has deep pocketed competitors like HUL, ITC, Dabur, Marico etc. We attach an exit multiple of 15x of its FY17E EPS of Rs.44.48 to arrive at the target price of Rs.667. We initiate coverage on Emami Ltd with a BUY rating and a target price of Rs.667 implying a 31% upside potential from CMP of Rs.510.65.

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