Emami Acquires 26% Stake in Axiom Ayurveda, Enters Health Juice Segment
On 29-sep-2023, Emami Ltd., a prominent Indian FMCG company, made an exciting foray into the health juice category by acquiring a 26% stake in Axiom Ayurveda Pvt Ltd, the firm behind the popular AloFrut brand of beverages. This strategic move caused Emami's shares to rise by 2% to ₹535 on the NSE.
Emami's Vision in the Juice Category
Harsha V Agarwal, vice chairman and managing director of Emami Ltd., expressed their enthusiasm for this new partnership, highlighting the growing importance of health and wellness in consumer preferences. He emphasized that Emami sees substantial potential in the juice segment, particularly with the 'AloFrut' brand.
While the exact deal size remains undisclosed, Axiom Ayurveda Pvt Ltd is a notable player in this venture. The company operates a manufacturing facility in Ambala, Haryana, and is in the process of establishing a state-of-the-art facility in Jammu, with an investment of ₹160 crore.
AloFrut has established a strong presence across various market segments, including general trade, government institutions, modern trade, and e-commerce platforms. The brand's uniqueness lies in its beverages, which combine aloe vera pulp with fruit juices, offering a blend of taste and health.
Emami's entry into the juice category puts them in direct competition with other FMCG giants such as Dabur Ltd. and PepsiCo India, highlighting the company's commitment to diversifying its product portfolio.
Emami Ltd. has been actively expanding its portfolio, evident from its acquisition of the talcum powder brand Dermicool from Reckitt last year for a total consideration of ₹432 crore.
For the financial year ending March 31, 2023, Axiom Ayurveda recorded a turnover of ₹129 crore. Axiom Ayurveda is not limited to the juice segment, it also offers a range of other beverage products and personal care items, contributing 15-20 % to its overall business.
Emami Ltd.'s Diverse Portfolio
Emami Ltd. is the flagship company of the Emami Group and boasts a diverse product portfolio that includes power brands like Navratna, BoroPlus, Fair & Handsome, Zandu Balm, Mentho Plus, and Kesh King. Over the years, Emami has made significant acquisitions, including Zandu in 2008, Kesh King in 2015, and Crème 21, Germany, in 2019. Among its major brands are Boroplus, Fair & Handsome, and Navratna.
This strategic investment in Axiom Ayurveda Pvt Ltd positions Emami Ltd. to tap into the growing health juice market while diversifying its product offerings. The partnership is expected to benefit both companies as they work together to make AloFrut a leading brand in the segment.
Emami Q1 Performance
In the Q1FY24 result, Emami demonstrated an impressive 86.5% year-on-year increase in its consolidated net profit, which amounted to ₹137.72 crore. In comparison, the company reported a profit of ₹73.83 crore in the same period of the previous year.
Despite an impressive annual performance, the company declared consolidated net profit with a minor decline of 4.6% compared to the previous quarter, Q4FY23, where it had ₹144.43 crore.
The company's consolidated revenue from operations also showed healthy growth, rising by 6.8% year-on-year to reach ₹825.66 crores In Q1FY24. This impressive performance was an improvement from ₹773.31 crore recorded in Q1FY23.
And, the total income for the first quarter of fiscal year 2024 reached ₹833.94 crore, showing a notable increase from the ₹779.64 crore reported in the corresponding period of the previous year.
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