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ICICI Securities Report
Our conviction on EPL Ltd. is now more fervent. EPL is at the cusp of transition– in our view, a rerating is imminent.
An emerging theme is EPL's customers taking to reducing/reusing plastic wastes. EPL too, at this juncture, has transformed smartly to recyclable tubes, thus aligning with its customers.
We do accede to the fact that the past two years have been choppy, but these were external factors that are largely behind.
We expect EPL to grow Ebitda/net profit at compound annual growth rate of 15.9%/35.6% over FY24–27E while FCF generation springs by 2.3 times in FY27E and FCF yield (FY27E) is at an attractive 5.7% of its enterprise value.
EPL's global market share in laminate tubes is enviable at 35% in oral care and ~10% in personal care – headroom here exists. We raise target price to Rs 350 (from Rs 275.) stems from a 16.5% higher FY26E EPS; PE multiple revised to 24x FY26E (from 22 times). Retain Buy.
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