KOLKATA: Fast moving consumer goods (FMCG) company Emami on Monday reported a Rs 78-crore net profit for the third quarter ended December 31, 2009, which is nearly twice its Rs 40 crore net in the earlier corresponding period. The higher profit is courtesy the company’s integration with Zandu and its market penetration across the world market.

Emami’s third quarter net was on a consolidated turnover of Rs 350 crore, which grew 30.3% (including inorganic growth of 6.5%). “Consolidated EBIDTA climbed 90% to Rs 106 crore (including inorganic growth of 19%) over the earlier corresponding period,” Emami announced on Monday. The Emami board, incidentally, had approved the financial results on Saturday.

Analysts ET spoke to were quick to acknowledge that the Emami-Zandu integration was obviously working. “The integration of Zandu and its penetration across the world market continued to contribute to Emami’s performance. Despite increased promotional expenditure, Emami was able to attain higher EBIDTA margins of 31.7%, vis-à-vis 20.7% a year earlier, led by its brand value, rationalised costs and synergies from Zandu acquisition,” Microsec Capital assistant vice president (research) Nitin Prakash Daga said. Incidentally, for the nine months ended December 31, 2009, Emami’s net profit also doubled at Rs 130 crore on a consolidated turnover of Rs 747 crore (grew 43% including inorganic growth of 18.7%). Consolidated EBIDTA grew 134% at Rs 195 crore (including inorganic growth of 51.5%).

“The results were better than market expectation. It is clear that Emami is thinking of expansion actively. It is looking at inorganic routes to grow. Its brands like Navratna Oil and Boroplus Antiseptic Cream are gaining market share. So one can go ahead and buy the stock on decline,” CD Equisearch director (research) Rajesh Agarwal told ET.

The Emami stock closed the day at Rs 520.05 on BSE, a shad lower than the day’s high of Rs 532.95. “The stock is trading at a high PE multiple of 28.3x. However, the company plans to launch new product lines in ayurvedic division and aggressively penetrate its herbal cosmetic products. Furthermore, synergies from Zandu, in our view, will continue to aid margins with its premium brand, efficiencies, and rationalisation of costs,” Mr Daga said.

Emami said its international business with revenues of Rs 41 crore has grown by 36% during the quarter. Growth in the first nine months is 32% with exports at Rs 89 crore. It attributed the growth largely to the demand from Middle East and Africa.

Besides announcing the financial results, the company inducted Mr YP Trivedi, a Rajya Sabha member; Mr SB Ganguly, chairman Emeritus of Exide Industries; Mr Amit Kiran Deb, chairman of Gujarat Ambuja Housing Development; and Ms Priti Sureka, brand director of the company, as directors in the Emami board.