Mumbai:Personal care products maker Emami Ltd posted a 9 % jump in third quarter net profit hurt by rising input costs, and plans to hike product prices by 3-4% from January end to offset margin pressure.
Indian fast-moving consumer good firms have been battling strong inflation in commodity-sensitive categories as prices of agri and crude related inputs surge.
Emami reported a consolidated net profit of Rs 85.55 crore from Rs 78.05 million rupees in the December quarter. Net sales jumped 15% to Rs 406 crore.
“Prices of menthol, LLP have risen over 6% during the quarter and that is a very sharp rise, and at the same time packaging material costs such as cost of paper, plastic has also shot up,” Mohan Goenka, director of Emami said.
“I do not expect the raw material situation to ease anytime before next fiscal,” he said.
Emami, which counts LLP (light liquid paraffin) and menthol as key raw materials, manufactures personal care brands such as ‘Fair and Handsome´, ‘Navratna Oil´, ‘Boroplus´ and ‘Sonachandi Chyawanprash´.
The firm’s operating profit before other income, interest and exceptional items fell 2% to Rs 99.8 crore.
Emami expects to maintain margins in the fourth quarter of the current fiscal on account of the price hikes taken now, Goenka added.
The firm’s sales registered a 15% growth on the back of robust 20% volume growth, he said.
Emami’s international business during the quarter grew 14% due to increased offtake and strong demand in the overseas markets.
The consumer firm’s Dubai unit acquired 90.6% stake in Pharma Derm S.A.E.Co, Egypt which has a manufacturing facility and plans to manufacture all its products and supply it to the African and Middle Eastern markets, Goenka added.
Shares of the firm were down 0.89% at Rs 410.45 rupees at the Bombay Stock Exchange.