Emami Ltd. shares experienced a surge of 5% today, buoyed by a bullish outlook from Goldman Sachs, which projects a potential upside of up to 60% driven by a strong earnings recovery. The international brokerage firm has maintained a "Buy" rating on the stock, setting a target price of Rs 825 per share, a significant jump from its last close of Rs 513 on the NSE.

The positive sentiment is further fueled by expectations of improved margins and a boost in demand during the winter season. Brokerages anticipate that Emami's growth and valuation are currently undervalued compared to the broader FMCG sector. Emami is currently trading at a FY27 P/E of 23.6x, considerably lower than the sector average of 45.7x.

Goldman Sachs anticipates a robust recovery in Emami's performance over the next four quarters, projecting a year-on-year growth of 10% in the second half of FY26, with Q3 expected to outperform Q4. The brokerage also believes that Emami's new brands will significantly scale up in the next two to three years. Emami has been focusing on premiumization and innovation to cater to evolving consumer preferences.

Despite a revenue dip recently, Emami's strategic focus on premium products and innovative solutions is expected to drive future growth. The company's commitment to meeting consumer needs through new offerings is likely to contribute to its earnings recovery.

While the stock has seen a 15% correction in 2025 and is trading 40% below its all-time high, the Goldman Sachs report has instilled confidence among investors. The brokerage expects Emami to demonstrate strong growth in the coming quarters.

Analysts suggest that while some market froth may have dissipated, the future recovery of the stock hinges on consistent earnings growth. The positive outlook from Goldman Sachs provides a strong foundation for investor confidence as Emami moves forward.