Emami shares soar, hit analysts' target price — what's driving the FMCG stock

Emami share price, buyback: The stock of Emami surged on Wednesday after the skincare and healthcare FMCG company said its board will meed on March 24 to consider a proposed buyback of shares. Emami shares gained by as much as Rs 30.4, or 8.9 per cent, to Rs 376 apiece on BSE.  

The Emami stock finished with a gain of 5.9 per cent for the day at Rs 366 apiece on the bourse, trading in huge volumes. A total of 1.1 lakh Emami shares changed hands on the exchange on Wednesday, as against a daily average of 15,000 in the past two weeks, according to provisional exchange data.

What does a share buyback mean and what does it do?

A share buyback is a type of corporate action which enables a listed company to reward its shareholders. A buyback of shares reduces the number of outstanding shares in the market, and, in turn, boosts the value of the remaining ones.

Emami shares target price 

Emami shares breached Zee Business Analyst Kushal Gupta's target price of Rs 355. Ahead of the opening bell on Wednesday, the analyst had recommended buying the Emami stock in the cash segment with a stop loss at Rs 340.  

Is there more upside in Emami shares?

Analysts at Phillip Capital believe Emami offers a favourable risk-reward ratio despite a weak operating performance. The brokerage maintained a ‘buy’ call on Emami with a target of Rs 485 apiece. 

Phillip Capital pointed out that the company's management sees pressure in demand and gross margin to ease off in the quarter ending March 2023 owing to softening of raw material prices and its favourable product mix.  

Emami share price history 

Emami shares have lost 16 per cent of their value in the past three months, a period in which the Sensex index has declined four per cent. They have fallen 26 per cent over a period of one year while Sensex has edged up 0.3 per cent.

On Monday, the Emami stock touched a 52-week low of Rs 341 per share, 

What does Emami do? 

Emami is in the business of manufacturing and marketing personal care and healthcare products. Its popular brands include Zandu Balm, Kesh King, Navratna and Boroplus. 

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