STRATEGIC MANAGEMENT -

II PROJECT

By
GROUP 5
Trideep Baruah – 18PGP204
Ainesh Kudadah – 18PGP227
Prasad Rathi – 18PGP238
Vedant Mundada – 18PGP245
Venu Vardhan – 18PGP246
Ayush Kumar – 18PGP256
 EMAMI GROUP
• Group Companies
 Emami Paper Mills Limited
 Emami Agrotech Limited
 Emami Frank Ross Limited
 Starmark
 Emami Chisel Art
 CRI Limited
 Emami Cement Limited
 Emami Realty Limited
 Emami Art Limited
 AMRI Hospitals
• Plan to divest non core business
• Focus on monetizing assets
• ₹1000 Cr IPO of Emami Cement approved
by SEBI
• Foray into spices market
• Plan to cell cement unit
• Second round of funding in The Man
Company
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EMAMI LTD - OVERVIEW

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 GUIDING PRINCIPLES
• To contribute whole heartedly towards the
environment and society integrating all our
stakeholders into the Emami family
• To make Emami synonymous with natural
beauty and health in the consumers mind
• To drive growth through quality and innovation
in products and services.
• To be part of every household in the
country
• To be a major player in every
product category we venture into
• To be one of the most respected
marketer in the country
• To be recognized as a global brand

• Making people healthy

and beautiful, naturally
• To strengthen and foster in the employees,
strong emotive feelings of oneness with the
company through commitment to their future
• To uphold the principles of corporate
governance
• To encourage decision making ability at all levels
of the organization
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TIMELINE

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2019
Debt Reduction:
• Sold 10% share in early 2019 from ₹1600
Crore
• Sold another 10% share in mid 2019 from
₹1230 Crore
• Group debt of ₹2200 still remains

Focus on Growth:
• Onboarded Boston Consulting Group
• Explore new channels and existing products
• Aims to be debt free by end of fiscal year
(₹110 Crore)
• Crème acquisition

Miscellaneous
• Katrina Kaif new brand ambassador (7 oils)
• Packaging upgraded
• Q1 profit grows by 47% YoY
• Healthcare, Male grooming and Pain
Management –ve
• Navratna, Kesh King +ve
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 FAMILY ADVISORY BOARD

• Representation from the younger generation

• Members:
 Priti Sureka, Aditya Agarwal, Harsha Agarwal
 Manish Goenka and Prashant Goenka
• US based The Family Business consulting group helped
in the process
• Younger generation shares a close relationship
• Younger members are not different from each other in
their values, mindset and approach to business
• All businesses have one member from each family on
board as a director
• Formal code of conduct: ensures no conflict
• Daughter in laws and son in laws are not allowed to
involve in businesses greater than ₹10,000 Cr.
• Grand children can join as per interest

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 RULES OF GOVERNANCE
“Emami’s success is rooted in the mutual respect and bond within the ‘family’. But it is also a function of strong
processes and clear rules” – Shri R.S. Agarwal

01 FAMILY GOVERNANCE RULE 02 BUSINESS GOVERNANCE RULE

• Members should not be ostentatious • Not allowed businesses:

• No actions that brings disrepute to the • Alcohol

family
• Tobacco
• Free to pursue interest outside the
company-support up to ₹5 Cr • Non-veg foods

• Shareholding is equally split • Consult outside firms such as Mckinsey

on important issues
• Fixed & equal withdrawal money

• Good communication between members

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 PUBLIC ISSUE

• 1995: Kemco Chemicals (partnership firm)

was converted into a Public Limited Company
Emami Ltd
• 2005: Public Issue of 50 lacs Equity Shares of ₹
2/- each at a price of ₹ 70.
• The issue was oversubscribed within few
seconds of its opening - 4 times of the issue
size
• Initial shareholder who invested ₹ 1,000 for
100 shares and invested ₹ 4,000 following a
rights issue would presently own Emami
shares worth around ₹ 6.7 crore

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LATEST FINANCIALS

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 MARKET REACTIONS TO MAJOR ACQUISITIONS

• Zandu (Oct 2008) ( Approx ₹ 1000 Cr)

On acquisition of Zandu, the shares dropped by 20%
from ₹ 48 /share to ₹ 38 /share approx.
This was on account of the premium paid by Emami
to Zandu from its initial offer of ₹ 7315/share to ₹
16500/ share

• Kesh King (June 2015) (₹ 1651 Cr)

Emami shares declined after the deal was
announced and closed 5.8% lower from 556 to 524
because the transaction was envisaged as a transfer
of the business as a going concern
on a slump-sale basis.

INDIAN INSTITUE OF MANAGEMENT RAIPUR - MARKETING MANAGEMENT II 11

BRANDS OVERVIEW

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BRANDS STRENGTH

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 STRATEGIC STEPS
Grow bottom line
• Effective cost control initiatives
• Reduce proportion of ad-spend with
increase in volumes
• Stabilization of new launches and brands
• Economies of scale
• Leverage location advantage
• Strengthen growth markets
• Develop new markets
• Premiumization
• Acquisitions
• Restructuring of the
Driving the top line distribution network
• Aggressive promotion via celebrities
• Expand distribution to reach rural
pockets “The strategy of creating a niche segment and being the first
• Innovate & enter new product mover have really paid very well for Emami because MNCs
categories don’t to enter small or non-existing segments or until the
• Brand extensions segment gains a certain size and seems profitable to enter.”
• Widen international footprint
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DISTRIBUTION OVERHAUL

• Direct Supply
• Increase Rural penetration
• No wholesaler
• Expected 2x multiples effect on sales
volume
• Outlet reach to increase by 1 lakh outlets
per year for initial years
• Sales people to generate sales,
distributors to supply
• Sales force increase by 15-20% for
distributor
• Addition of 30000-40000 outlets in
urban areas
• Increase of 50000 outlets in rural areas
and be supplied directly

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ACQUISITIONS

• Aggressive acquisitions
• The market unhappy about the ways the
capital was raised
• Most of the capital was either raised
from the balance sheet and accruals or
debt.
• Company turned the products around
and integrated the products effectively
• Higher PAT and profit margin
• Sustainable for long term?
• Being a family business, doesn’t want to
divest its stake
• Raised large amounts of debt
• Pressurized the business with the
interest payments.
• To reduce the debt, sold stakes

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 ZANDU ACQUISITION

• Acquired in 2008 via hostile acquisition

• Rhymed well with “Making people
healthy and beautiful, naturally”
• Zandu Balm became one of the fire
brands of Emami
• Other Zandu brands like Zandu
Pancharishta, Zandu Nityam, Lalima etc
didn’t synergize with Emami image and
reported non flattering growth

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 ZANDU ACQUISITION

Currently Emami places Zandu Balm

in Consumer Care division and not in
Health Care Division

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SUMMARY

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 References
• http://www.emamiltd.in/
• Emami Presentations and Reports
• https://www.thehindubusinessline.com/companies/emami-ropes-in-bcg-to-formulate-growth-strategies-may-
go-for-e-tailing/article28657102.ece
• https://www.asianage.com/business/companies/260619/paper-cement-next-in-emami-sight.html
• https://www.livemint.com/companies/news/emami-said-to-pick-arpwood-credit-suisse-for-cement-unit-sale-
1563018193380.html
• https://www.moneycontrol.com/news/business/earnings/emami-q1-review-rural-slowdown-dampens-volume-
growth-valuation-at-steep-discount-4316611.html
• https://www.livemint.com/industry/advertising/katrina-kaif-to-endorse-emami-s-seven-oils-in-one-hair-oil-
brand-1565953759748.html
• https://economictimes.indiatimes.com/markets/stocks/earnings/emami-posts-47-jump-in-q1-profit-at-rs-39-
crore/articleshow/70584976.cms
• https://www.moneycontrol.com/news/business/companies/emami-plans-to-pare-rs-2600-crore-debt-at-group-
level-in-9-months-4320211.html
• https://www.telegraphindia.com/business/emami-adds-spice-to-portfolio/cid/1699133
• https://strategicmoves.wordpress.com/2010/09/14/the-emami-way/
• https://www.rediff.com/business/report/why-emami-is-taking-the-direct-route/20170502.htm

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THANK YOU 

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