EPL - Ready To Ride The Sustainability Wave: Systematix

Systematix Research Report

EPL Ltd. management reiterated its vision of becoming the “most sustainable packaging company in the world” at its recent plant visit. It leads the conversion of sustainable tube supplies, having sold 25-30 million PCR (post-consumer recycled material) tubes last year.

Management expects 75-80% of the industry to move to PCR tubes over the next one-two years, except in pharma, where regulations are stringent. EPLL surpassed its target of doubling sustainable tubes volumes in FY24 (up 21% YoY) and expects to triple volumes in the next three years.

EPL’s strategy is to accelerate the conversion process and gain wallet share. Its long-term focus is to deliver profitable growth through a four-point strategy-

1. accelerate growth in beauty and cosmetics and pharma,

2. build wallet share in all key markets,

3. lead sustainability and inspire customers to turn sustainable, and

4. drive multi-year projects to harness ‘fuel for growth’.

For FY25, management expects to achieve healthy volume growth and improve margins across geographies. Management reiterated its double-digit revenue growth guidance and is confident of clocking 20% Ebitda margin in FY25.

Reiterating Buy with a target price of Rs 264 (unchanged), based on 20 times FY26E P/E (unchanged).

Key risks: Global recession could keep demand subdued, spike in commodity prices.

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