EPL Quarter 3 Revenue
EPL Limited‘s quarterly numbers were below estimated values of Motilal Oswal, yet there was 10% growth in profit of the company. “Revenue grew 7% YoY to Rs 9.5 billion as compared to estimated Rs 9.75 billion, on the back of broad-based growth across all regions, except EAP was down 8% YoY. Gross Margin contracted 20 basis point YoY to 54.8%, due to volatility in raw material prices. EBITDA margin expanded marginally by 10 basis points YoY to 15.8% as compared to estimated. 16.4% on account of a drag in margins from EAP and Europe, which was offset by AMESA and America. EBITDA grew 7% YoY to Rs 1.5 billion as compared to estimated Rs 1.6 billion. Adjusted PAT grew 10% YoY to Rs 628 million while estimated was Rs 574 million. Revenue from AMESA, Americas and Europe grew by 9%, 19%, and 10% YoY to Rs 3.5 billion, Rs 2.3 billion and Rs 1.9 billion, respectively.”
EPL: Leading global packaging company
EPL Limited is one of the leading global player of speciality packaging, owned by Blackstone Group, headquarters in Mumbai. Its erstwhile name was Essel Propack Limited which was later acquired by Blackstone in 2019 and re-branded in 2020. It operates in 5 product categories; Oral Care, Beauty and Cosmetics, Pharma and health, Food and Nutrition and Home Care. It 5 product segments includes laminates, laminated tubes, extruded tubes, caps and closures, and dispensing system. The company is the largest laminated tubes (approximately 8 billion) manufacturer, global leader in oral care segment, 46% of contribution comes from Personal Care & beyond, and has strong clientèle relationship with marquee FMCG for 20+ years. It’s global footprint includes 20+ factories and presence in 10+ countries. Till date it has been granted 75 patents due to strong innovation platform that focuses on sustainability.
Why EPL is a Good Stock to Buy, with a target price of Rs 210 per share.
Motilal Oswal suggests investor to buy EPL stock because they believe the company’s margins will improve and the stock price would rally up by 38% to Rs 210 per share. “With the softening of raw material prices and price hikes taken across regions in recent months, we expect the sequential recovery in margin witnessed in 3QFY23 to continue going forwards. Factoring in muted 3QFY23 earnings, we lower our earnings estimates forFY23 / FY24 /F Y25 by 1%/8%/5%, respectively. We value the stock at 19x Dec’24 EPS to arrive at our price of Rs 210. We reiterate our Buy rating on the stock.”
Currently the market price of the EPL stock ended at Rs 154.50 per share, and its market capitalisation is Rs 4,916.34 crore. In last one year the EPL stock price plunged by 17.31%.
Disclaimer
The stock has been picked from the brokerage report of Motilal Oswal, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.