Trading at a discount of 33% from high, packaging stock declares dividend | Mint – Mint

EPL Ltd. is a packaging-related small-cap company with a market valuation of Rs. 4,809.13 crore. The company is the largest speciality packaging firm in the world. The technical network of EPL spans 12 nations. With 20 operations in 12 countries and four decades of international expertise, the firm delivers more than 8 billion tubes annually to more than 1200 clients throughout the world. The company has announced its Q2 earnings as well as an interim dividend.

The company has said in a stock exchange filing that “This is to inform the exchanges that the Board of Directors of the Company at its meeting held on today i.e 5 November 2022, inter alia, has approved Interim Dividend of Rs. 2.15 per equity share of face value of Rs. 2 each. The interim dividend will be paid to the members whose names appear on the Register of Members / beneficiary ownership position as on the Record Date i.e 15 November 2022. The Interim Dividend will be paid on or from 16 November 2022 by way of direct credit or dispatch of warrants/demand drafts or electronic mode to those who are members as on record date.”

In Q2FY23, the company reported net revenue of 948.10 Cr compared to 870.10 Cr in Q2FY22 and 831.80 Cr in Q1FY23, representing YoY growth of 9% and a QoQ growth of 14%. In Q2FY23, the company reported an EBITDA of 148.60 Cr compared to 159.40 Cr in Q2FY22 and 125.6 Cr in Q1FY23, representing a YoY fall of 6.80% and a QoQ growth of 18.30%. In Q2FY23, the company reported a net profit of 47.60 Cr compared to 52.50 Cr in Q2FY22 and 3.50 Cr in Q1FY23, representing a YoY fall of 9.30% and a QoQ growth of 36.0%.

Mr. Arafat Saiyed – Senior Research Analyst at Reliance Securities said “EPL reported revenue of Rs9.48bn, up 9% YoY and 14% QoQ (in-line with our estimates of Rs9.41bn). The company recorded a revenue growth across all the regions. Revenues for AMESA increased by 17% YoY, Americas grew by 20% YoY, Europe increased by 9% YoY, while EAP grew by 1%.”

He said “EBITDA for the quarter stood at Rs1.49bn (our estimates of Rs1.64bn), down 7% YoY (up 18% QoQ). EBITDA margin declined by 265bps YoY to 15.7% primarily due to a rise in RM and other costs. All region witnessed lower margin in 1QFY23 except EAP. PAT declined 20% YoY (up 36% QoQ) to Rs476mn, against our estimates of Rs583mn.”

“We expect its market and wallet share to remain intact, despite the price hike expected in the near term. EPL has witnessed a considerable shift in its strategy after the acquisition by Blackstone. Focus on optimizing resources, driving growth through the Personal Care segment, and the recent acquisition of CSPL are steps in the right direction. We have BUY rating on EPL,” said Mr. Arafat Saiyed.

The shares of EPL Ltd closed on the NSE at 152.00 apiece on Friday, down by 0.78% from the previous close of 153.20. In its last trading session, the stock recorded a total volume of 180,154 shares compared to the 20-Day average volume of 165,357 shares. In the last 1 year, the stock has fallen 31.50% and on a YTD basis, the stock has fallen 27.88% so far in 2022. On the NSE, the stock had touched a 52-week-high of 230.00 on (09-November-2021) and a 52-week-low of 147.15 on (20-June-2022), indicating that at the current market price the stock is trading 33.91% below the high and 3.29% above the low.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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