13 November 2020
Essel Propack
2QFY21 Results Update | Sector: Midcaps
EPL
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
EPLL IN
316
79.4 / 1.1
319 / 126
-7/10/89
144
CMP: INR252
TP: INR326 (+30%)
AMESA and Europe drive overall performance
Buy
EPL Ltd. (EPLL) reported strong growth across Europe and the EAP region
amid the COVID-19 crisis. This was primarily led by an increase in market
share and new customer additions. Operating profit was offset by sluggish
performance in Oral Care in the AMESA region.
2QFY21 numbers were in line with our estimates, and we maintain our
estimates for FY21. However, in the backdrop of the acquisition, we increase
our earnings estimate for FY22/FY23E by 6%/3%. Maintain
Buy.
Revenue increased 5% YoY to INR7.7b (est. INR8b), primarily led by a strong
performance from Europe and the EAP region. The EBITDA margin expanded
70bp YoY to 21.6% (est. 21.1%), and EBITDA stood at INR1.6b (up 9% YoY).
This is attributable to revenue growth from personal care product sales and
improved operational efficiency across geographies. PBT grew 25% YoY to
INR1,019m (est. INR974m), primarily owing to a 38% YoY drop in interest
cost (to INR97m) and 68% YoY increase in other income (to INR32m). Adj.
PAT decreased 16% YoY to INR670m (est. INR722m).
In 1HFY21 revenue / EBITDA / adj. PAT grew 11%/20%/18%. In 1HFY21, EPLL
generated CFO of ~INR2b, up 6% YoY.
AMESA revenue increased 6% YoY to INR2.6b. EBIT margins expanded by
420bp to 14.8%, and EBIT increased to INR384m (up 49% YoY).
EAP revenue grew 9% YoY to ~INR2b on the back of a strong business
pipeline in China and increased focus on regional players. The EBIT margin
expanded 110bp to 20.7%, with EBIT at INR395m (up 15% YoY).
Americas revenue de-grew 7% YoY to INR1.5b. EBIT margins contracted by
470bp to 10.1%, and EBIT stood at INR155m (down 37% YoY).
Europe revenue grew 11% YoY to INR1.9b, driven by higher sale of personal
care products. EBIT margins expanded by 140bp to 8%, and EBIT stood at
INR158m (up 35% YoY).
EPLL announced the acquisition of Creative Stylo Packs (Creative) at an EV of
INR2.5b (for a cash consideration of INR1.6b for a 72.5% stake and balance
through 2.34m EPLL share issuances). Creative recorded revenue of INR1b in
FY20, with an EBITDA margin of 29.6% (at INR305m). It is valued at 8.3x
EV/EBITDA as of FY20 (v/s EPLL’s EV/EBITDA of 15x in FY20). Creative
manufactures plastic tubes (57% of revenue share), laminated tubes (36%),
and corrugated boxes (7%). Creative majorly focuses on personal care
products as the B&C segment contributes ~89% to the total tubes revenue,
followed by the Pharma segment, which contributes to the remaining share.
Financials & Valuations (INR b)
Y/E Mar
2021E 2022E
Sales
30.7
35.1
EBITDA
6.7
7.9
PAT
3.0
3.7
EBITDA (%)
21.8
22.4
EPS (INR)
9.3
11.5
EPS Gr. (%)
37.1
23.2
BV/Sh. (INR)
52.8
61.8
Ratios
Net D/E
0.2
0.1
RoE (%)
18.5
20.1
RoCE (%)
14.7
17.0
Payout (%)
47.7
38.7
Valuations
P/E (x)
27.0
21.9
EV/EBITDA (x)
12.4
10.5
Div Yield (%)
1.4
1.5
FCF Yield (%)
1.6
1.8
Europe continues on its growth trajectory
2023E
38.8
8.9
4.3
22.9
13.6
17.9
70.5
-0.0
20.5
18.1
35.5
18.6
9.0
1.6
5.9
Shareholding pattern (%)
Sep-20 Jun-20 Sep-19
Promoter
52.0
75.0
83.0
DII
15.3
2.4
2.1
FII
14.3
4.9
3.9
Others
18.5
17.8
11.0
Note: FII includes depository receipts
Research Analyst: Sumant Kumar
(Sumant.Kumar@MotilalOswal.com)
Darshit Shah
(Darshit.Shah@motilaloswal.com) /
Yusuf Inamdar
(yusuf.inamdar@motilaloswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
Essel Propack
Highlights from management commentary
The acquisition of Creative is expected to increase overall revenue share from
personal care products for EPLL – as Creative’s revenue is highly dominated by
personal care products. Furthermore, Creative’s manufacturing facility at
Himachal Pradesh is expected to increase EPLL’s penetration in northern India.
~25% of the Americas revenue comes from travel tubes (Oral Care segment) and
sampler tubes (severely affected by lockdown). However, this is a temporary
phenomenon, and with the easing of the lockdown, business is believed to have
returned to pre-COVD levels in 3QFY21.
We believe earnings momentum would continue on the back of (a) growing
share of personal care products, (b) new launches (hand cream / handwash), (c)
a leadership position in the Oral Care segment, and (d) increasing shift from
plastic/aluminum tubes to laminated tubes.
2QFY21 numbers were in line with our estimates, and we maintain our
estimates for FY21. However, in the backdrop of the acquisition, we increase our
earnings estimate for FY22/FY23E by 6%/3%.
We expect a revenue/EBITDA/PAT CAGR of 12%/17%/26% over FY20–23E. We
value the stock at 26x Sept’22 EPS. Our TP of INR326 implies a 29% upside.
Maintain
Buy.
(INR M)
FY21
Var
2QE
%
8,007
-4
9.6
6,315
1,692
-2
21.1
581
156
19
974
Valuation and view
Consolidated - Quarterly Earnings Model
Y/E March
Gross Sales
YoY Change (%)
Total Expenditure
EBITDA
Margins (%)
Depreciation
Interest
Other Income
PBT before EO expense
Extra-Ord expense
PBT
Tax
Rate (%)
Minority Interest & Profit/Loss of
Asso. Cos.
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
1Q
6,298
-0.9
5,213
1,086
17.2
568
137
66
447
-109
556
153
27.5
-11
392
283
-41.7
4.5
FY20
2Q
3Q
4Q
7,305 7,108 6,889
6.9
2.4
-0.7
5,780 5,530 5,504
1,525 1,579 1,385
20.9 22.2 20.1
576
580
574
156
134
130
19
42
8
812
907
688
203
0
0
609
-1
-0.2
-17
593
796
49.1
10.9
907
289
31.8
-17
601
601
32.3
8.5
688
197
28.6
-5
486
486
-1.7
7.1
1Q
7,415
17.7
5,949
1,466
19.8
579
162
51
776
161
FY21
2Q 3QE
7,703 7,754
5.4
9.1
6,041 5,990
1,662 1,764
21.6 22.8
578
583
97
90
32
42
1,019 1,133
0
0
FY20
4QE
7,876
14.3
6,078
1,798
22.8
585
85
80
1,208
0
FY21
27,600 30,749
2.0
11.4
22,026 24,058
5,574 6,690
20.2
21.8
2,298 2,325
557
434
134
205
2,854 4,136
94
161
2,760
638
23.1
-50
2,073
2,167
10.1
7.8
3,975
1,144
28.8
-22
2,810
2,971
37.1
9.7
615 1,019 1,133 1,208
159 334
286
364
25.9 32.8 25.3 30.1
-12
-15
-17
829
829
38.0
10.7
22
866
866
78.2
11.0
974
268
27.5
-17
689
689
-9.3
9.0
-3
444 670
605 670
113.6 -15.8
8.2
8.7
13 November 2020
2
 Motilal Oswal Financial Services
Essel Propack
Exhibit 1:
Key performance indicators
Y/E March
Segment Revenue Gr. (%)
AMESA
EAP
Americas
Europe
Segment EBIT Margin (%)
AMESA
EAP
Americas
Europe
Cost Break-up
RM Cost (% of sales)
Employee Cost (% of sales)
Other Cost (% of sales)
Gross Margins (%)
EBITDA Margins (%)
EBIT Margins (%)
2QFY19
-1%
17%
11%
12%
11%
20%
13%
3%
44%
18%
20%
56%
18%
12%
3QFY19
13%
23%
17%
21%
14%
19%
11%
1%
43%
19%
19%
57%
19%
13%
4QFY19
2%
8%
29%
16%
12%
10%
19%
6%
43%
18%
20%
57%
19%
13%
1QFY20
-4%
-11%
3%
17%
9%
13%
10%
2%
42%
20%
20%
58%
17%
8%
2QFY20
4%
-5%
15%
18%
11%
20%
15%
7%
43%
18%
18%
57%
21%
13%
3QFY20
-1%
1%
-1%
12%
15%
19%
15%
6%
41%
18%
18%
59%
22%
14%
4QFY20
-9%
-12%
4%
16%
11%
11%
17%
7%
1QFY21
-3%
46%
11%
30%
7%
22%
10%
9%
2QFY21
6%
9%
-7%
11%
15%
21%
10%
8%
41%
42%
42%
20%
20%
19%
19%
18%
17%
59%
58%
58%
20%
20%
22%
12%
12%
14%
Source: Company, MOFSL
Key exhibits
Exhibit 2: Consolidated revenue trend
Revenue (INRm)
16.7
10.4
6.8
-0.9
6,835 6,944 6,937
6,298
7,305 7,108
6.9
2.4
-0.7
6,889
7,415 7,703
1,247 1,313 1,316 1,086 1,525 1,579 1,385 1,466 1,662
5.4
Growth (%)
17.7
18.2
18.9
19.0
20.9
Exhibit 3: Consolidated EBITDA trend
EBITDA (INRm)
22.2
Margin (%)
20.1
19.8
21.6
17.2
Source: Company, MOFSL
Source: Company, MOFSL
PAT (INRm)
Growth (%)
113.6
670
49.1
Exhibit 4: Consolidated adj. PAT trend
23.4
-7.8
534
455
2.2
493
283
-41.7
32.3
-1.5
-15.8
605
796
601
486
Source: Company, MOFSL
13 November 2020
3
 Motilal Oswal Financial Services
Essel Propack
Exhibit 5: AMESA region
AMESA
Revenue (INRm)
Growth (%)
EBIT (INRm)
Margin (%)
Growth (%)
2QFY19
2,337
-1
268
11
-27
3QFY19
2,538
13
365
14
3
4QFY19
2,365
2
293
12
-23
1QFY20
2,251
-4
208
9
-40
2QFY20
2,433
4
258
11
-4
3QFY20
2,516
-1
369
15
1
4QFY20
2,153
-9
241
11
-18
1QFY21
2QFY21
2,190
2,590
-3
6
160
384
7
15
-23
49
Source: Company, MOFSL
1QFY21
2QFY21
2,020
1,908
46
9
438
395
22
21
145
15
Source: Company, MOFSL
1QFY21
2QFY21
1,510
1,528
11
-7
154
155
10
10
17
-37
Source: Company, MOFSL
1QFY21
2QFY21
1,977
1,939
30
11
179
158
9
8
446
35
Source: Company, MOFSL
Exhibit 6: EAP region
EAP
Revenue (INRm)
Growth (%)
EBIT (INRm)
Margin (%)
Growth (%)
2QFY19
1,847
17
361
20
22
3QFY19
1,723
23
321
19
38
4QFY19
1,539
8
159
10
2
1QFY20
1,388
-11
179
13
-14
2QFY20
1,749
-5
343
20
-5
3QFY20
1,740
1
327
19
2
4QFY20
1,353
-12
149
11
-6
Exhibit 7: Americas region
Americas
Revenue (INRm)
Growth (%)
EBIT (INRm)
Margin (%)
Growth (%)
2QFY19
1,435
11
192
13
-9
3QFY19
1,477
17
165
11
-6
4QFY19
1,649
29
311
19
107
1QFY20
1,366
3
131
10
-12
2QFY20
1,648
15
245
15
28
3QFY20
1,457
-1
215
15
30
4QFY20
1,713
4
297
17
-5
Exhibit 8: Europe region
Europe
Revenue (INRm)
Growth (%)
EBIT (INRm)
Margin (%)
Growth (%)
2QFY19
1,479
12
38
3
-41
3QFY19
1,439
21
16
1
-223
4QFY19
1,641
16
106
6
104
1QFY20
1,517
17
33
2
69
2QFY20
1,740
18
117
7
210
3QFY20
1,618
12
97
6
497
4QFY20
1,897
16
135
7
28
2QFY21 conference call highlights
Operational Highlights – 2QFY21/1HFY21
AMESA revenue increased 6% YoY to INR2.6b. EBIT margins expanded by 420bp
to 14.8%, and EBIT increased to INR384m (up 49% YoY). This was ascribed to
strong growth across verticals and newly launched hygiene products (hand
sanitizers). However, this was partly offset by sluggish demand in B&C (Beauty &
Cosmetic) in the backdrop of the pandemic.
EAP revenue grew 9% YoY to ~INR2b on the back of a strong business pipeline in
China and increased focus on regional players. The EBIT margin expanded 110bp
to 20.7%, with EBIT at INR395m (up 15% YoY), primarily on increasing revenue
share from the B&C and Pharma segments.
Americas revenue de-grew 7% YoY to INR1.5b on account of lower sale of travel
tubes (Oral Care segment) and sampler tubes in the US (severely affected by
lockdown). EBIT margins contracted by 470bp to 10.1%, and EBIT stood at
INR155m (down 37% YoY).
Europe revenue grew 11% YoY to INR1.9b, driven by higher sale of personal care
products. EBIT margins expanded by 140bp to 8%, and EBIT stood at INR158m
(up 35% YoY). This was driven by gains in market share in the Personal Care
segment and higher conversion from plastic to laminated tube, thereby leading
to margin improvement.
4
13 November 2020
 Motilal Oswal Financial Services
Essel Propack
Acquisition of Creative Stylo Packs (Creative)
It was founded in 2012 by two young entrepreneurs – Bhavik Shah and Darshan
Shah.
FY20 revenue stood at INR1,031m (57% from plastic tubes, 36% from laminated
tubes, and 7% from corrugated boxes) and adj. EBITDA was INR305m (29.6%
margin).
Creative has a manufacturing facility in Himachal Pradesh with annual
production of ~200m tubes. Some of its marquee clients include L’Oreal,
Himalaya, Marico, Joy, and Zydus Wellness.
~90% of revenue comes from B&C and the remaining from the Pharma segment.
It acquired the company at EV of INR2,539m. EPL plans to purchase 72.5% stake
through cash and the balance 27.5% stake through the issuance of EPL shares to
the founders of Creative Stylo Packs.
Creative’s founders would become part of EPL’s senior management team after
the transaction and play a role in expanding EPL’s global business.
Closure of the transaction is contingent upon the satisfaction of customary
conditions. The transaction is expected to close in 4QFY21.
It achieved higher revenue growth (in the last three years, Creative Stylo Packs’
revenue grew by 8.3% v/s EPLL’s revenue growth of 6.2%) and was EBITDA
margin-accretive with synergies of INR35m. Acquisition is expected to boost
personal care revenue and add plastic tube capacity in northern India.
Creative Stylo Packs has the strategic advantage of having plants in northern
India, closer to the customer.
Existing capacity provides headroom to grow revenue.
Funding: The acquisition would be funded through internal accruals.
Personal Care contribution stood at 47% in 1HFY21. Revenue from Personal Care
grew at 11% to INR6,377m in 1HFY21.
Personal Care contribution declined to 46.8% in 1HFY21 (v/s 52.4% in 1HFY20),
weighed by sluggish demand in B&C on account of the COVID-19 outbreak.
However, B&C was seen recovering in the latter part of 2QFY21.
Timely innovation and launches of hygiene products have boosted 1HFY21
performance.
Personal Care contribution increased to 41.1% in 1HFY21 (v/s 34.1% in 1HFY20).
Growth is largely driven by the B&C and Pharma segments.
It has a strong business pipeline; there is an increased focus on fast-growing
regional players.
Personal Care contribution increased to 27% in 1HFY21 (v/s 26.3% in 1HFY20).
Transaction overview
Acquisition rationale
Personal Care
AMESA
EAP
Americas
13 November 2020
5
 Motilal Oswal Financial Services
Essel Propack
New customer wins across categories, bottle to tube product conversions, and
the cross-selling of personal care products to existing oral care customers was
observed.
~25% of the business comes from travel tubes (most of the travel tubes are oral
care tubes) or sampler tubes (severely affected by lockdown). However, this is a
temporary phenomenon, and previous growth trends are believed to have
returned from 3QFY21.
Personal Care contribution increased to 66.8% in 1HFY21 (v/s 65.4% in 1HFY20).
Strong new customer wins were reported across Personal Care categories; it has
a robust business development pipeline.
Growth in the Europe region would be driven by the company targeting the
steady Oral Care business and conversion from rigid to plastic tubes.
With a growing health consciousness among people, the company has begun
manufacturing handwashes and hand creams, along with hand sanitizers. It
plans to move ahead with the entire portfolio in the Health and Hygiene space.
Hand sanitizer sales were lower in 2QFY21 v/s 1QFY21, due to inventory filing at
customers’ end.
The company is committed to increasing the share of B&C tube sales.
The EBITDA margin increased YoY in 2Q, driven by a better product mix and
productivity improvement.
BOD has declared interim dividend of INR2.05 per share.
With operations returning to normal across the customer base and geographies,
the impact of COVID-19 is gradually subsiding.
Europe and EAP led quarterly performance and are believed to continue on their
growth trajectory. Europe is believed to be leading EPLL on the back of an
increase in market share in the Personal Care segment and higher conversion
from rigid to laminated tubes.
Post the introduction of the ‘hand sanitizer tube’ as another source of revenue,
EPLL also introduced hand creams and handwashes, and plans to launch hand
soap shortly. This is in line with the company’s long-term strategy to diversify its
product portfolio. On the back of a rising health consciousness among the
populace, we believe personal hygiene products would gain traction and
contribute a sizeable chunk to overall revenue.
We believe the acquisition of Creative to be margin-accretive in the near-to-
medium term as Creative’s revenue is highly dominated by personal care
products (higher ASP v/s oral care products) and offers synergy benefits.
We believe earnings momentum would continue on the back of (a) growing
share of personal care products, (b) new launches (hand creams / handwashes),
(c) a leadership position in the Oral Care segment, and (d) an increasing shift
toward laminated tubes from plastic/aluminum tubes.
2QFY21 numbers were in line with our estimates, and we maintain our
estimates for FY21. However, in the backdrop of the acquisition, we increase our
earnings estimate for FY22/FY23E by 6%/3%.
We expect a revenue/EBITDA/PAT CAGR of 12%/17%/26% over FY20–23E. We
value the stock at 26x Sept’22 EPS. Our TP of INR326 implies 29% upside.
Maintain
Buy.
Europe
Other highlights
Valuation
13 November 2020
6
 Motilal Oswal Financial Services
Essel Propack
Exhibit 9: Change in estimates
Earnings change
(INRm)
Revenue
EBITDA
Adj. PAT
FY21E
31,053
6,680
2,930
Old
FY22E
34,185
7,509
3,454
FY23E
37,867
8,520
4,176
FY21E
30,749
6,690
2,971
New
FY22E
35,072
7,872
3,661
FY23E
38,839
8,895
4,317
FY21E
-1%
0%
1%
Change
FY22E
3%
5%
6%
FY23E
3%
4%
3%
13 November 2020
7
 Motilal Oswal Financial Services
Essel Propack
Financials and valuations
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
Raw material cost
Employees Cost
Other Expenses
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Total Tax
Tax Rate (%)
Profit/loss from associates
Minority Interest
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liabilities
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Goodwill on Consolidation
Capital WIP
Total Investments
Current Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Misc Expenditure
Appl. of Funds
FY16
21,275
-8.4
9,235
3,744
4,258
17,237
81.0
4,038
19.0
1,232
2,806
609
238
2,435
23
2,459
776
31.6
48.4
30
1,701
1,678
24.2
7.9
FY17
23,023
8.2
10,079
4,052
4,673
18,804
81.7
4,219
18.3
1,415
2,804
581
353
2,576
157
2,732
787
28.8
10.5
53
1,903
1,747
4.1
7.6
FY18
24,239
5.3
10,366
4,338
4,886
19,590
80.8
4,649
19.2
1,671
2,978
550
264
2,691
-50
2,642
889
33.7
-10.4
26
1,716
1,766
1.1
7.3
FY19
27,069
11.7
11,648
5,006
5,424
22,078
81.6
4,991
18.4
1,861
3,130
613
285
2,802
31
2,833
932
32.9
53.2
29
1,925
1,895
7.3
7.0
FY20
27,601
2.0
11,568
5,311
5,147
22,026
79.8
5,574
20.2
2,298
3,277
557
134
2,854
-94
2,760
638
23.1
-6.3
43
2,073
2,166
14.3
7.8
FY21E
30,749
11.4
12,945
5,838
5,275
24,058
78.2
6,690
21.8
2,325
4,365
434
205
4,136
-161
3,975
1,144
28.8
23
45
2,810
2,971
37.1
9.7
FY22E
35,072
14.1
14,850
6,547
5,803
27,201
77.6
7,872
22.4
2,577
5,294
457
210
5,047
0
5,047
1,363
27.0
25
49
3,661
3,661
23.2
10.4
(INR m)
FY23E
38,839
10.7
16,351
7,030
6,563
29,943
77.1
8,895
22.9
2,793
6,102
385
233
5,950
0
5,950
1,606
27.0
28
54
4,317
4,317
17.9
11.1
(INR m)
FY23E
636
21,786
22,421
86
4,032
475
27,014
30,405
17,557
12,847
1,775
1,253
160
0
18,535
5,004
7,023
4,288
2,220
7,556
3,281
3,884
391
10,979
0
27,014
FY16
314
9,334
9,648
81
7,014
305
17,048
10,470
1,229
9,242
0
571
304
0
10,073
1,987
3,312
844
3,930
3,141
1,282
1,603
257
6,932
0
17,048
FY17
314
10,076
10,390
57
7,924
317
18,688
15,637
3,984
11,652
142
193
153
0
10,254
2,460
3,766
1,028
3,000
3,707
1,473
1,834
400
6,547
0
18,688
FY18
315
12,191
12,506
43
7,299
357
20,204
17,691
5,992
11,699
142
417
131
0
12,032
2,864
4,590
1,735
2,843
4,217
1,884
2,037
295
7,815
0
20,204
FY19
631
13,249
13,880
52
6,313
510
20,754
20,495
7,564
12,931
142
413
168
0
11,547
3,234
4,934
1,344
2,035
4,447
2,065
2,113
269
7,100
0
20,754
FY20
631
14,695
15,326
86
6,432
475
22,320
23,359
9,862
13,497
142
395
160
0
13,865
3,672
4,903
3,712
1,578
5,740
2,446
3,016
278
8,125
0
22,320
FY21E
631
16,163
16,794
86
5,732
475
23,088
25,859
12,187
13,672
142
1,329
160
0
13,871
3,955
5,462
2,697
1,758
6,087
2,702
3,075
309
7,785
0
23,088
FY22E
636
19,002
19,637
86
5,032
475
25,230
28,405
14,764
13,641
1,775
1,266
160
0
15,230
4,546
6,342
2,337
2,005
6,841
2,981
3,507
353
8,388
0
25,230
13 November 2020
8
 Motilal Oswal Financial Services
Essel Propack
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
Consolidated - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
FY16
5.3
9.2
30.4
0.8
17.8
47.7
27.5
8.3
4.1
21.4
0.3
5.2
19.5
12.4
12.7
2.0
1.2
34
57
22
3.2
4.6
0.6
FY17
5.5
9.9
32.7
1.1
21.8
45.9
25.3
7.7
3.8
20.6
0.4
5.1
17.4
12.9
12.2
1.5
1.2
39
60
23
2.8
4.8
0.7
FY18
5.6
10.8
39.3
1.2
26.4
45.4
23.3
6.4
3.5
18.4
0.5
6.5
15.4
11.3
11.2
1.4
1.2
43
69
28
2.9
5.4
0.4
FY19
6.0
11.8
43.7
1.2
23.6
42.3
21.3
5.8
3.1
17.1
0.5
1.8
14.4
11.5
11.4
1.3
1.3
44
67
28
2.6
5.1
0.4
FY20
6.8
14.0
48.2
2.0
37.6
37.0
17.9
5.2
3.0
14.9
0.8
6.4
14.8
12.5
13.7
1.2
1.2
49
65
32
2.4
5.9
0.2
FY21E
9.3
16.7
52.8
3.5
47.7
27.0
15.1
4.8
2.7
12.4
1.4
4.1
18.5
14.7
16.8
1.2
1.3
47
65
32
2.3
10.1
0.2
FY22E
11.5
19.6
61.8
3.7
38.7
21.9
12.8
4.1
2.4
10.5
1.5
4.6
20.1
17.0
19.1
1.2
1.4
47
66
31
2.2
11.6
0.1
FY23E
13.6
22.4
70.5
4.0
35.5
18.6
11.3
3.6
2.1
9.0
1.6
14.8
20.5
18.1
20.8
1.3
1.4
47
66
31
2.5
15.8
0.0
(INR m)
FY23E
5,950
2,793
152
-1,606
-640
6,649
28
6,677
-1,987
4,690
0
233
-1,754
0
-1,000
-385
-1,533
-54
-2,972
1,951
2,337
4,288
FY16
2,507
1,232
320
-833
475
3,701
-93
3,608
-1,959
1,650
0
1,230
-729
0
-1,760
-498
-341
-600
-3,200
-320
1,164
844
FY17
2,743
1,415
284
-764
494
4,172
-485
3,687
-2,069
1,618
98
-769
-2,740
7
546
-392
-414
-508
-762
184
844
1,028
FY18
2,631
1,671
277
-816
-488
3,276
159
3,435
-1,375
2,060
1
184
-1,189
510
-1,199
-372
-478
-1
-1,539
706
1,028
1,735
FY19
2,886
1,861
380
-901
-404
3,821
-257
3,564
-3,003
561
2
1,122
-1,879
53
-1,028
-485
-478
-138
-2,076
-391
1,735
1,344
FY20
2,854
2,298
423
-638
40
4,976
-100
4,876
-2,846
2,030
8
1,603
-1,236
0
119
-557
-780
-55
-1,272
2,368
1,344
3,712
FY21E
4,136
2,325
229
-1,144
-675
4,872
-138
4,734
-3,434
1,300
0
205
-3,230
0
-700
-434
-1,341
-45
-2,520
-1,015
3,712
2,697
FY22E
5,047
2,577
247
-1,363
-964
5,545
25
5,571
-4,116
1,455
0
210
-3,905
600
-700
-457
-1,418
-49
-2,025
-360
2,697
2,337
13 November 2020
9
 Motilal Oswal Financial Services
Essel Propack
NOTES
13 November 2020
10
 Motilal Oswal Financial Services
Essel Propack
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
13 November 2020
11
 Motilal Oswal Financial Services
Essel Propack
********************************************************************************************************************************
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in
nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in
all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
13 November 2020
12