Geojit is bullish on Essel Propack has recommended buy rating on the stock with a target price of Rs 341 in its research report dated January 10, 2018.
Geojit's research report on Essel Propack
Constant technological innovation and expansion of product range has made Essel Propack a leading global specialty packaging company with a 36% market share of the world's oral care market in volume terms. Emerging markets would be the key growth driver for oral and non-oral care categories driven by growth in Indian business helped by recovery in the FMCG industry, improving EAP & European region performance and increased volumes from major markets in US, Germany and China. Synergies from European operations, ramp up of large long-term contracts, increased focus on non-oral care segment and new customer additions would help drive revenue CAGR of 17% over FY17-20E in Europe business. Hence, we model revenue CAGR of 12% over FY17-20E With company’s enhanced focus on increasing the contribution of non-oral care, we expect EBITDA margin to rise to 20.1%/20.8% for FY19E/20E.
We recommend BUY rating on the stock with a target price of Rs. 341, based on 17x FY20E EPS, an upside of 16%.
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