Citigroup maintained its buy rating on Emami but slashed its target price by over 20 percent to Rs 340 from Rs 435 earlier after the promoters of Emami Group sold 10 percent of their stake in flagship Emami to raise about Rs 1,230 crore.

According to a statement released by the company, this amount is intended to be used primarily for further reducing debt at the promoter level.

“The absolute valuations are now 20x adjusted one-year forward P/E, and the current valuations of a 40 percent discount to the sector are at multi-year low,” said the Citi note. Going forward, further news flow on any group asset monetisation could aid re-rating.

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