EPL Ltd. share price target

31 July 2020 Essel Propack Essel Propack (ESEL) reported strong growth (13.6% constant currency growth) across geographies amid the COVID-19 crisis, primarily led by East Asia Pacific (EAP) and Europe. The ramp-up in operations led to an increase in operating leverage in EAP and Europe. Factoring a beat to our estimates for the quarter, we increase our earnings estimate for FY21/FY22E by 20%/12%, after considering a further ramp-up in operations and new launches across geographies, to arrive at TP of INR253. strong performance in EAP and Europe. EBITDA margins expanded by 250bp is attributable to a better product mix and operating leverage, including INR380m). AMESA revenue declined 3% YoY to INR2.2b. EBIT margins contracted by 190bp to 7.3% and EBIT decreased to INR160m (down 23% YoY). EAP revenue increased by 46% YoY to INR2b on a growing business pipeline in China and increased focus on regional players. The EBIT margin expanded 880bp to 21.7%, with EBIT at INR438m (up 2.

Amesa, EAP regions revenue growth marred by lockdown While America & Europe (together contribute ~50% to topline) regions reported revenue growth of 4% & 16% YoY in Q4FY20 (~5%, ~16%, respectively, in FY20), lower volume offtake in the Amesa and EAP regions hurt overall topline growth. Strong revenue growth in Americas and Europe was due to lower base, new customer. Adjusted with Covid-19 impact, topline in Q4FY20 would have up 7% YoY. Further, revenue growth in Americas, Europe is likely to remain intact owing to new client addition and...

23 May 2020 Essel Propack Revenue across EAP and AMESA region was impacted during 4QFY20 due to the lockdown in China and India (Mar20). However, this was offset by robust growth in Europe and Americas region. Thus, overall consolidated revenue declined 1% YoY. We have cut our estimates for FY21/FY22E by 14%/5%, factoring in the slowdown in business across multiple geographies to arrive at a TP of INR200. Maintain Revenue declined marginally by 1% YoY to INR6.8b (v/s est. INR7.3b), primarily due to sluggish performance in EAP and AMESA (for certain portion of the quarter). EBITDA margins expanded by 110bp YoY to 20.1% (v/s est. 20.7%), largely due to improvement in the overall product mix and strong growth in the Europe region. However, this was offset by margin contraction in AMESA and Americas region. Adj. PAT declined 1% YoY to INR486m (v/s est.

Furthermore, EPL has set up of a greenfield unit in Assam, India (annual capacity of ~220m tubes) and is focused on building a strong business development pipeline in China. EPL remains focused on both these segments as (a) long-term contracts with its oral care clients provide strong medium- to- long-term growth visibility and (b) improving share of personal care category is expected to drive overall margins as market value of personal care is 3-4x that of oral care. Blackstone has completely revamped EPLs board with fit-for-purpose professionals and brought in industry veterans for providing strategic guidance and growth initiatives. EPL has also restated its growth strategy under the tutelage of Blackstone and shifted its area of focus on accelerating growth in Personal Care, maintaining leadership position in Oral Care and prudent allocation of capital across its regions of operations. EPL could also leverage upon Blackstones strong capital base for organic and inorganic expansion.

es in America and Europe (revenue growth of 14.8% and 17.7% y-o-y respectively in the same period). ). While Personal Care category grew by 21.3% y-o-y, Oral Care category which contributes to almost 58% of the...

Essel Propack (EPL) reported flattish topline (down ~9% QoQ) led by poor performance in AMESA and EAP regions (mainly India and China respectively). While India demand slowdown due to macro headwinds, the Chinese revenue slowdown was largely due to ongoing US-China trade issues. Despite significant rise in the contribution of non oral care to topline (up from 40.7% in Q1FY19 to 46.6% in Q1FY20) the EBITDA margin was under pressure mainly due to sharp decline in the profitability of the AMESA regions. We believe, the lumpiness of domestic business coupled with...

Lower offtake by key customers in India during the quarter crippled growth in net revenues to 1.5% (y-o-y) y) in Q4FY19 in AMESA. Egypt continued to post strong revenue growth for the quarter at 27.7% (18.0% on constant currency basis) helped by both oral and non--oral care categories. Offtake in oral care category in China has been declining over the past few years despite the subsidiary retaining its wallet share with key customers. In the United States, a second very high-speed...

Essel Propack (EPL) reported topline growth of ~10% YoY led by strong revenue growth in the Americas and Europe regions by ~29% and ~16% YoY, respectively. However, Amesa regions (contributes ~34% to topline) revenue growth remained muted at ~2% YoY mainly due to lower volume offtake by its key customers in India. Better plant utilisation (in Americas & Europe) coupled with higher contribution of non-oral care business in the topline (up from 40.4% in Q4FY18 to 42.7% in Q4FY19) helped drive EBITDA margin during Q4FY19. The management has guided for better EBITDA...

EPL is a global leader in laminated tubes selling ~7 billion tubes across 10 countries. EPL's clientele includes marquee global brands (Colgate, HUL, etc) in the oral care, beauty, cosmetics and pharmaceutical industries. Increasing presence in emerging markets and further penetration in the fast growing beauty, cosmetics and pharmaceutical segments is expected to accelerate growth, going forward. We believe revenue, earnings CAGR of ~12%, ~13% in FY18- 21E would largely led by strong performance in emerging markets. We believe a demand recovery in the Amesa and Europe region...

Essel Propack posted 16.7% YoY growth in revenue in Q3FY19 supported by broad-based growth across geographies. AMESA region, largest contributor to overall sales, grew by 13.5% YoY in Q3FY19 led by robust revenue growth in Egypt (up by 54.8% YoY) in both oral and non-oral care categories. Egypt nonoral care category revenue composition improved by 4.9 percentage point (pp) YoY. India revenues grew just 8.9% YoY in Q3FY19 impacted by lower pharma segment volumes due to change in pharma regulations. However, with the issues being addressed by the industry, we expect India business to witness an improved performance going ahead given strong order pipeline coupled with ramp-up of Assam facility and commencement of production of a new laminator in December 2018. The new facility will increase the lamination capacity by 25 million square metres to 80 million square metres per annum....