Emami Ltd has posted a 33 per cent drop in consolidated PAT at Rs.61.34 crore during the second quarter ended September 30, 2015, from Rs.91.52 crore in the corresponding period last year.
In a note to the accounts, the company said that amortization of Kesh King trademarks / brands acquisition cost of Rs.60.87 crore was charged against profits during the quarter. Emami acquired the Kesh King’s entire assets on June 12 for Rs.1,684 crore.
Naresh H Bhansali, CEO (Finance, Strategy and Business Development), explained that the intangible assets of Kesh King were valued by an independent valuer.
The useful life of the assets has been determined at five and 10 years. Based on the valuation, the amortisation would be spread over two time frames pro-rata.
“The amortization of Kesh King intangible assets cost every quarter in the first five years would be at Rs.60.87 crore. The management has decided that for the next five years, the amortisation figure would be Rs.22.5 crore every quarter,” Bhansali said.
Emami’s Q2 consolidated turnover at Rs.575 crore, however, grew 17.4 per cent over the corresponding period.
Harsha V Agarwal, Director, said: “Our bottom line and EBIDTA margin have improved due to lower input cost and cost reduction initiatives. The healthcare range has continued its robust growth led by the stellar performance by Zandu Pancharistha. This competitive performance was delivered despite the subdued consumer sentiment and an untimely monsoon.”
Emami’s international business grew by 11.5 per cent during the second quarter.
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