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Nomura downgrades Emami to neutral from buy

Emami should be a key beneficiary of a pick up in rural consumption growth in the second half of FY17 due to its product portfolio, positioning, leadership.

, ET Bureau|
Updated: Sep 27, 2016, 06.20 PM IST
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Emami should be a key beneficiary of a pick up in rural consumption growth in the second half of FY17 due to its product portfolio, positioning, leadership.
Emami should be a key beneficiary of a pick up in rural consumption growth in the second half of FY17 due to its product portfolio, positioning, leadership.
MUMBAI: Nomura has downgraded shares of Emami to 'neutral' from 'buy' as it believes the 20% rise in stock price year to date captures positives for the company.

After a strong first quarter, the rest of the financial year 2016-2017 will also be strong for the company due to full integration of Kesh King into the business, consumption revival and favourable season on a low base of 2015-2016 financial year, said Nomura in a report.

Emami should be a key beneficiary of a pick up in rural consumption growth in the second half of FY17 due to its product portfolio, positioning, leadership in categories it operates in and expansive distribution network, it added.

Emami's re-launch of Navratna brand with new value added launches is a key step towards premiumisation, said Nomura. However, with the run up in the stock price, the positives are now priced in, it said.

"We prefer Hindustan Unilever in the large cap space, or Dabur India in the mid-cap space," said Nomura.

Using the sum of the parts valuation, the brokerage increased target price on the stock to Rs 1,315 from Rs 1,255.
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