Dec 07, 2012, 06.08 PM | Source: Moneycontrol.com
Way2Wealth is bullish on Essel Propack and has recommended buy rating on the stock in its December 7, 2012 research report.
, Way2Wealth |
“Essel Propack, ranked among the topmost laminate tube manufacturers globally, Essel Propack has presence across 12 nations with 24 manufacturing facilities to cater to over 750 clients globally. The top 10 clients account for ~ 45% of the topline. The firm is present in the manufacture of laminate tubes, plastic tubes & flexible packaging. The tubes find application in oral care, cosmetics, other personal care, pharmaceutical, food and industrial sectors. Currently laminate tubes dominates contribution to topline with 75%. The Indian business operations consists of laminate tubes, plastic tubes & flexible packaging. Flexible packaging business is operated under a wholly owned subsidiary Packaging India Pvt. Ltd.”
“Oral care was the prime segment catered to 6-7 years back. The company’s conscious effort to diversify its presence in non oral care is now bearing fruit. In standalone operations value terms contribution of non oral care now stands at 41% and on a consolidated level at 34.8%. With a global market share of 33% in the laminated tubes domain, Essel Propack leads as the world’s largest manufacturer with units operating across countries such as India , China, USA, Poland, Germany, Egypt, Russia, Philippines, Indonesia, Mexico, Colombia, and United Kingdom (recently integrated with polish operations).”
“At CMP of Rs43.9, the stock is trading at a PE of 9.9x in FY13E and 7.4x in FY14E it EPS of Rs4.4 & Rs5.9 respectively. We expect the losses from Europe to come down; better performance by EAP and AMESA and stable performance by Americas will drive the consolidated earnings. We strongly believe that the restructuring in different geographies, plus robust demand from the FMCG sector and EPL holding as a dominant position with limited competitors will lead healthy growth. We are also of the opinion that the initiatives taken by the company will be more visible in FY14E. We recommend investors to BUY with a long term view,” says Way2Wealth research report.
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