Edelweiss Securities is bullish on Essel Propack has recommended Buy rating on the stock with a target price of Rs 317 in its research report dated February 5, 2018.
Edelweiss Securities' research report on Essel Propack
Essel Propack (EPL) reported lower-than-estimated Q3FY18 performance with revenue, at INR6.0bn, growing mere 1% YoY (net of GST); constant currency (CC) growth too came in at paltry 2% YoY (Q2FY18: 15%). While India and overall AMESA turned in a good show with EBIT jumping 65% YoY driven by operational efficiencies, EAP too reported stable 15% YoY EBIT growth.
OutlookWe build in 9%/11% growth in revenue/EBITDA driven by management’s time bound focus to improve performance in Europe and continued stable performance in other geographies. We value the stock at 9.0x FY20E EV/EBITDA, yielding TP of INR317. Maintain ‘BUY’.
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