Fast moving consumer goods company Emami's shares jumped on Wednesday, halting a losing streak that stretched to seven sessions in a row. The gain came as brokerages Credit Suisse and CLSA maintained their 'outperform' calls on the stock. The brokerages are of the view the Dermicool acquisition is positive for the firm.
The Emami stock rose as much as 3.9 percent during the session before settling at Rs 445.7 apiece on BSE for the day, up by Rs 13.9 or 3.2 percent from its previous close.
Emami shares had lost 10.7 percent of their value in the past seven sessions.
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Credit Suisse maintained an 'outperform' call on Emami but lowered its target price for the stock to Rs 640 from Rs 700. The brokerage said the company's acquisition of the Dermicool brand strengthens its presence in a profitable niche.
Last week, Emami said it acquired prickly heat powder brand Dermicool from Reckitt Benckiser Healthcare for Rs 432 crore.
Credit Suisse brought down its earnings per share estimates for Emami for FY23 and FY24 by 2-5 percent, however, continued with its 'outperform' call. It reduced its target price to Rs 470 from Rs 570.
The addition of Dermicool partially offsets an organic cut in earnings, according to the brokerage, which sees limited upside in the Emami stock.
CLSA also lowered its valuation multiple for the company from 30 times To 25 times.
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First Published: Mar 30, 2022 5:39 PM IST
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