Emami Ltd, the maker of personal and healthcare products, is probably turning shy of any possible acquisitions of foreign brands.
A robust 35% bottomline growth and 13% sales growth in the just concluded quarter, derived mainly from domestic market, appears to be a good enough reason.
“Only possibility (of using `300 crore of cash) is acquisition but at this point of time there aren’t enough opportunities,” director Mohan Goenka told analysts refusing to comment on whether company plans to distribute the cash as a special dividend.
Interestingly, Emami has been saying that it is looking actively at acquisitions.
“Presently, we are looking aggressively in the sectors of our presence. In case we identify good opportunities, we would be keen to acquire them,” managing director Sushil Goenka had said in the annual report without mentioning whether such opportunities lie within or outside the country.
“We are continuously looking at acquisitions as we have a good war chest. But our strategy has not changed. We are still India focused,” Goenka said after the second-quarter earnings refusing to comment on specific opportunities.
Goenka was asked about the specific case of unconfirmed media reports about Emami’s interest in acquiring a Philippine personal care brand Splash Corp.
Splash owns brands such as Extraderm, Maxi-Peel and Skin White, and also the country’s fastest growing skin care brand, Biolink.
After the big bang acquisition of Zandu Pharmaceutical in 2008, Emami had continued scouting for acquisitions but without success, notable miss being Paras Pharmaceuticals in 2010.
Emami is readying itself before the onset of the winter season, a key driver of growth in the second half of the fiscal when products specific to the weather conditions are pushed. But a prolonged monsoon, which boosted Emami’s rural demand in the second quarter, might dampen the onset of winter.