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Essel Propack Ltd.'s (EPL) future growth will be driven by increasing share of laminated tubes for packaging in high value and high margin non-oral care - cosmetics, pharmaceuticals and food segments. EPL leveraging on its global presence, is well placed to grow its non-oral sales at a CAGR of 18% over FY17-19E; thereby increasing non-oral share in sales to 50% (at present 42%) by FY19-20. We believe increasing contribution of value added products and rise in profitability from Europe, EAP and America are key growth triggers for EPL. We expect PAT to grow at 29% CAGR (FY17-19E) led by favorable product mix and margin expansion. EPL currently trades at 14xFY19P/E; strong profits, ROCE@20% and free cash flow yield@ 7% in FY19E indicate sufficient headroom for upside. We recommend Buy with Target Price of Rs.320 (17xFY19E EPS).
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About Me
- Ashish Gupta
- Share Broker Financial n Realty Consultant by profession Investment planner by interest Trustworthy by heart
Monday, 8 May 2017
Investment Idea : Essel Propack Ltd. - BUY
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