MOSL: EPL (Buy) - ANNUAL REPORT: Second COVID wave disrupts recovery
(EPLL IN, Mkt Cap USD1b, CMP INR238, TP INR320, 34% Upside, Buy)
EPL’s FY21 Annual Report highlights its performance and key initiatives in the Personal and Oral Care segments. The report also focuses on the business performance and change in dynamics across the four geographies: AMESA, Americas, EAP, and Europe. During FY21, EPL achieved a record high revenue share from Personal Care, despite tepid performance from the two major geographies: Americas and AMESA. Key highlights below:
Personal Care segment records strong growth despite a demand shortfall in certain regions
- Personal Care: EPL's revenue contribution from the Personal Care segment saw a 100bp YoY increase to 46% in FY21, with a corresponding revenue growth at 15% YoY to INR12.8b. However, the segment's performance was offset by slower pick-up of Personal Care volumes in Europe and Americas, due to lockdown restrictions in the backdrop of the second COVID wave. With the impact of pandemic gradually subsiding, both regions are expected to report strong volume growth in the near-term. Going forward, we expect revenue share from Personal Care to increase further with the resumption in demand for travel and sample tubes in Americas and addition of new clients across geographies. This is in line with EPL's long-term strategy as it plans to raise revenue contribution from the Personal Care segment to ~50% over the next 3-4 years.
Essel Propack Limited. Essel Propack Limited (EPL) is a producer of plastic packaging material in the form of multilayer collapsible tubes and laminates used primarily for packaging of toothpaste, personal care, cosmetics, pharmaceuticals, household and industrial products. The Company's geographical segments consist of Africa, Middle East and South Asia (AMESA), which includes operations in India and Egypt; East Asia Pacific (EAP), which includes operations in China, Philippines and Hong Kong; Americas, which includes laminated tubes with operations in the United States, Mexico and Colombia, and Europe, which includes laminated tubes and plastic extruded tubes with operations in Germany, the United Kingdom, Poland and Russia. The Company offers specialized large diameter laminated tubes. The Company offers laminated tubes with features, such as thermal timers, product authentication, child protection and aroma sensory. It provides packaging solutions for products in paste or cream or gel forms.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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