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MOSL: Morning India (4/March/20): 1. Essel Propack (Embarking on the next growth trajectory); 2. Departmental Retail; 3. EcoScope (EAI)

MOrning India (4/March/20):  1. Essel Propack (Embarking on the next growth trajectory); 2. Departmental Retail; 3. EcoScope (EAI)

 

Today’s top research idea

Essel Propack (Initiating Coverage): Embarking on the next growth trajectory; Ramp-up of operations and improvement in product mix to drive growth

• EPL is set to benefit from various expansion measures and efforts to improve its product mix across geographies over the last two years. Operating leverage benefits are likely to kick in with ramp-up of operations, particularly in the Americas and Europe.
• Moreover, its increasing share of higher-value personal care tubes will help improve marg Under Blackstone's leadership a renewed growth strategy and prudent allocation of capital will benefit the company in the long run. EPL is also well positioned to benefit from the increasing use of laminated tubes over aluminum. Also, new product launches such as Platina and Green Maple Leaf are expected to contribute to its growth.
• We estimate a CAGR of 8% in revenue and 20% in PAT over FY19-22. We value the stock at 20x FY22E EPS of INR10.5, arriving at a target price of INR210. We initiate coverage with a Buy rating.

Piping hot news

US Fed cuts interest rates by 50 bps

The U.S. Federal Reserve delivered an emergency half-percentage point interest rate cut Tuesday in a bid to protect the longest-ever economic expansion from the spreading coronavirus. “The coronavirus poses evolving risks to economic activity,” the Fed said in a statement. “In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate by 1/2 percent point.