Introduction:
EPL Limited (formerly known as Essel Propack Limited), is a specialty packaging global company, manufacturing laminated plastic tubes catering to the Beauty & Cosmetics, Pharma & Health, Food, Oral and Home.
The company was acquired by the Blackstone Group in August – 2019 from the Essel group of companies. Blackstone currently owns 51.5% stake. After the Acquisition by the Blackstone Group, the company has brought down their debts significantly.
Epl is the global leader in the laminated tubes packaging and they are number one global speciality packaging company and Every 1 in 3 toothpaste package is manufactured by the company.
Asia contributes 55 % of its Total revenue (India alone contributes 29 % of the total sales), Europe contributes 19 % and the rest from the American and south African nations. Oral care segment contributes 55 % of its revenue and the rest from the personal care segment.
It has established strong relationships with reputed multi-national and Indian clients such as P&G, Colgate, Unilever, GSK, Reckitt Benckiser, Johnson & Johnson, Dabur, Emami, Himalaya, Patanjali, etc.. Their strong relationship with its customer has helped to maintains its leading market share and to face the competition from the unorganized players.
Revenue Split by category
Revenue split by geography
| Region | % |
| Americas | 23% |
| Europe | 19% |
| Asia, Middle east, South Africa | 35% |
| East Asia and Pacific | 23% |
Clients:
The clients in this business are very sticky with most clients associated with the company for more than 5 years. The revenue growth of this business is mostly aligned with the revenue growth of its clients. Hence the diversification from oral health (almost saturated market) to personal care segment is the focus of the company to ensure revenue growth.
Key triggers for future growth:
The company has set up a new facility in Brazil which will get online in Q1FY24. Though the revenues in the first few quarters may not be substantial, in the long term there will be revenue growth because of that.
With China coming out of lockdown, there will be revenue growth as per management commentary in Q3FY23 concall. Also, there was a delay in procurement by one of the European clients which will lead to a one time increase in revenue for Q4FY23.
Also, the management expects the margin to improve and EBITDA margins to revert to long term numbers of 18%.
Financials: Last 8 quarters
| DESCRIPTION | 01-03-2021 | 01-06-2021 | 01-09-2021 | 01-12-2021 | 01-03-2022 | 01-06-2022 | 01-09-2022 | 01-12-2022 |
| Total Revenue from Operations | 810.2 | 799.1 | 870.1 | 883.4 | 880.2 | 831.8 | 948.1 | 944.9 |
| Total Expenditure | 739.1 | 725 | 782.6 | 819.2 | 821.6 | 783.6 | 881.6 | 884.7 |
| Profit after tax | 58.4 | 60.2 | 52.5 | 58.5 | 50.1 | 35 | 47.6 | 63 |
| Basic EPS | 1.8 | 1.83 | 1.61 | 1.81 | 1.54 | 1.06 | 1.46 | 1.98 |
| Gross Margin | 57% | 58% | 57% | 55% | 54% | 56% | 54% | 55% |
| EBITDA Margin | 17% | 18% | 18% | 16% | 15% | 15% | 16% | 16% |
| PAT Margin | 7% | 8% | 6% | 7% | 6% | 4% | 5% | 7% |
The EBITDA margin have reduced recently from 18% to 15%-16% due to higher raw material costs. The management believes that they will be able to transfer a significant portion of it and also reduce costs internally to bring margins back to previous levels.
