Emami spends Rs 156 crore on ads, yet Q2 profit, revenue decline

FMCG major Emami Ltd on Monday reported its second-quarter (Q2 FY26) results, posting a decline in both profit and revenue even as it increased spending on advertising and promotional activities.

The maker of brands such as Navratna hair oil and BoroPlus posted a 29.5% year-on-year (YoY) drop in consolidated net profit to ₹148 crore, compared with ₹210 crore in Q2 FY25.

Revenue from operations fell 10.3% YoY to ₹798 crore in Q2 FY26, against ₹890 crore a year earlier.

Advertising, sales, and promotional expenditure rose to ₹156 crore in Q2 FY26, up from ₹146 crore in the same period last year. In Q1 FY26, the company’s ad spend was even higher at ₹179 crore.

Emami also declared an interim dividend of 400% (₹4 per fully paid share of face value ₹1). The record date to determine eligible shareholders is November 14, 2025.

The company attributed the decline in performance to excessive rainfall, which affected offtake in talc and prickly heat categories on a high base, and to GST reforms, which disrupted trade.

According to the company, the reforms are structurally positive, with nearly 88% of its core domestic portfolio benefiting from a reduction in GST from 12% or 18% to 5%. This brings total 5% GST coverage in its core domestic business to around 93%.

“While this reform lays the foundation for long-term demand acceleration, its implementation caused temporary trade disruptions in September. Trade channels and consumers deferred purchases in anticipation of lower MRPs, while distributors focused on liquidating higher-cost inventory, resulting in short-term moderation in sales,” Emami said in a media release.

Excluding GST-impacted categories, the non-impacted portfolio grew 10% during the quarter.

“We are happy that over 90% of our core domestic portfolio now falls under the lowest GST rate of 5%, making our products more affordable and accessible. The quarter’s performance was temporarily impacted by trade disruptions linked to the pending GST revision and a weak summer. With improving sentiment and a favourable season ahead, we remain confident of strong growth in the coming quarters," said Harsha V Agarwal, Vice Chairman & Managing Director, Emami Ltd.

“October marked a clear turning point, with trade sentiment rebounding and deferred winter loading recovering, putting us on a solid footing for the second half. Our non-GST impacted portfolio delivered 10% growth in Q2, signifying intact consumer demand. These gains, coupled with the normalisation of trade post-GST reforms and strategic interventions, position us to sustain profitable growth and strengthen our foundation for long-term value creation," Mohan Goenka, Vice Chairman & Whole-Time Director added.