Emami shares hit a 52-week low at 442.50 rupees, down 2 per cent on the BSE index in trading Monday after the company announced its acquisition of “Dermicol”, one of the leading brands in the Prickly Heat Powder category and Cool Talc from Reckitt, For a total consideration of Rs 432 crore excluding taxes and duties. The stock fell below its previous low of Rs 446 on March 7, 2022.
The company said the acquisition is funded by internal accruals and is subject to the usual closing conditions.
The brand “Dermicool” is known for providing cooling and relief from the intense heat that occurs during the summer and has a great connection with consumers through its marketing campaign song “Aaya Mausam Thande Thande Dermicool Ka”. It captures about 20 percent of the market share in the high-growth and low-penetration category.
Combined with Emami’s Navratna Cool Talc, Emami will become a leader in this niche category, which will also help achieve synergistic benefits and optimize costs, Emami said in a press release.
The company considers acquisitions that not only add value and synergize with the existing line of business, but also provide opportunities for the organization to be present in the categories with high growth potential. She said Zandu, Kesh King and German brand Creme 21 are some of the brands or companies the company has acquired in the past few years.
However, the company’s shares have underperformed the market by dropping 23 percent in the past six months, compared to a 5 percent decline in the S&P C Sensex. Last year, it fell 6 percent versus a 16 percent rise recorded by the benchmark.
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