Archive · 10 Nov 2025
Emami's Q2 Profit Drops Amidst GST Changes and Weather Impacts
Emami, a company that makes everyday products like lotions and creams, saw its profits drop significantly in the July to September quarter.
This happened because new government tax rules (GST) caused some confusion for stores and customers, making them buy less for a short time.
Also, the weather was not good for some of their summer products, like cooling lotions, because it rained too much.
However, Emami explained that the new tax rules will actually help most of their products in the long run, making them cheaper for people.
Their products sold outside of India did well, and they are confident that sales will pick up in the coming months as the weather gets better and stores restock.
They also announced they are paying a special dividend to their shareholders.
Emami's net profit for Q2FY26 fell 29.7% year-on-year to ₹148.35 crore, with revenue decreasing 10.34% to ₹798.51 crore.
The company cited temporary trade disruptions due to new GST rate implementation and unfavorable weather impacting summer product sales as reasons for the decline.
Emami highlighted that the GST reform is structurally positive, with most of its core domestic portfolio now covered under the lowest 5% GST rate, benefiting consumers with price reductions.
Excluding GST-impacted categories, Emami's non-impacted portfolio grew by 10%, and its international business saw an 8% increase in growth.
Despite the quarterly dip, Emami expressed confidence in future growth due to improving market sentiment, a favorable season ahead, and strategic focus on premiumization and innovation.
- Who
- Emami (FMCG company)
- What
- Reported a decline in net profit and revenue for the second quarter, attributed to GST implementation disruptions and unfavorable weather, while also noting positive aspects of GST reform and international growth.
- When
- Second quarter of the fiscal year (ending September 2025)
- Where
- India
- Why
- Profit and revenue decline was primarily due to temporary trade disruptions from GST rate changes, impacting inventory and sales, coupled with weather affecting key product categories. The company remains optimistic due to the long-term benefits of GST reform and expected market recovery.
Challenges and Negative Impacts
Company's Perspective and Future Outlook
Financial Performance Decline
Challenges and Negative Impacts
Emami reported a 29.7% year-on-year drop in net profit to ₹148.35 crore and a 10% decrease in revenue to ₹798.51 crore for the second quarter.
Company's Perspective and Future Outlook
Management attributes the quarter's performance to temporary trade disruptions caused by GST rate implementation and unfavorable weather impacting the summer portfolio.
Impact of GST Implementation
Challenges and Negative Impacts
New GST rates caused temporary trade disruptions in September, with channels and consumers deferring purchases to liquidate higher-cost inventory. This coincided with the peak winter portfolio build-up, leading to a deferment in loading.
Company's Perspective and Future Outlook
The company views the GST reform as structurally positive, with 88% of its core domestic portfolio benefiting from rate reductions to 5%. Emami swiftly passed on these benefits, resulting in 7-13% price reductions for consumers and enabling non-GST impacted categories to grow by 10%.
Weather and Portfolio Performance
Challenges and Negative Impacts
Excessive rains in the second consecutive quarter negatively impacted the offtake of talc and prickly heat categories due to a high comparative base.
Company's Perspective and Future Outlook
Despite challenges, the international business saw 8% growth, and the company is confident in strong growth in the coming quarters due to improving market sentiment, favorable seasons, and a focus on premiumization and innovation.
- Second Quarter Net Profit (FY26)
- ₹148.35 crore (29.7% YoY decline)
- Second Quarter Revenue (FY26)
- ₹798.51 crore (10.34% YoY decline)
- Total Expenses (Q2 FY26)
- ₹619.98 crore (3.15% decrease)
- EBITDA (Q2 FY26)
- ₹179 crore (29% decline)
- Core Domestic Portfolio GST Rate
- Approximately 93% now at 5%
- Non-GST Impacted Portfolio Growth
- 10% in Q2
- International Business Growth
- 8%
- Interim Dividend
- 400% (₹4 per share for FY26)
Sources
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