Temporary GST-related trade disruption and heavy rains hit earnings, though Emami expects growth to rebound in the second half of FY26
FMCG major Emami reported a sharp year-on-year slide in its July–September earnings, with net profit (attributable to owners) dropping 30.2 per cent to Rs 148.35 crore in Q2 FY26. The company attributed the decline to short-term disruption in trade channels ahead of the Goods and Services Tax (GST) rate cut and unusually heavy rainfall that dented demand in a few categories. The firm had posted Rs 212.66 crore in profit in the same quarter last year.
Consolidated revenue for the quarter slipped 10.3 per cent to Rs 798.51 crore. On a sequential basis, revenue declined 11.7 per cent, while net profit was down 9.7 per cent.
Calling the GST revamp “structurally positive,” Emami said nearly 88 per cent of its core domestic portfolio now benefits from the shift to a 5 per cent GST bracket, as rates were reduced from 12 per cent or 18 per cent. This lifts the share of its products under the 5 per cent slab within its domestic business to around 93 per cent.
But the transition triggered temporary market disturbances in September.
“Trade channels and consumers deferred purchases in anticipation of lower MRPs, while distributors focused on liquidating higher-cost inventory, resulting in a short-term moderation in sales”, the company said.
The changeover also overlapped with the crucial winter-season stocking cycle, delaying wholesale loading. Heavy rainfall further weighed on offtake in talc and prickly-heat products, which were already up against a strong base.
Excluding categories affected by GST changes, Emami’s remaining portfolio grew 10 per cent during the quarter, while its international business expanded by 8 per cent.
Harsha V Agarwal, Vice-chairman and managing director, Emami, said the quarter’s performance was influenced by one-off trade disruptions tied to the GST review and softer summer demand.
“With improving market sentiment and a favourable season ahead, we remain confident of strong growth in the coming quarters. Our bottom line remains stable, with costs well managed despite global supply chain challenges due to geopolitical issues”, he further added.
Mohan Goenka, Vice-chairman and whole-time director, said the business saw a reset in October as sentiment improved and winter-portfolio loading bounced back, strengthening the outlook for the second half of FY26. He noted that the non-GST-impacted portfolio grew 10 per cent in Q2, indicating resilient underlying demand.
