ICICI Securities's research report on EPL
EPL’s Q4FY24 print was mixed, though it came slightly higher than our EBITDA estimate. The company reported midsingle- digit growth in India [standalone] EBITDA, which is concerning. EAP was impacted by seasonality due to Chinese New Year. It had better performance in Americas and Europe with acceleration in revenue growth and improvement in margins, which shows company’s efforts are yielding results. EPL has guided to improve EBITDA margin at >20% with cost optimisation efforts in Americas and Europe, mix benefit with higher sales in beauty & cosmetics, and operating leverage.
Outlook
We cut our EPS by 2-3% over FY25/26E factoring in gradual recovery in margins. Our target price has been reduced to INR 225 (earlier: INR 240), valuing the stock at 18x FY26E EPS (from 22x FY25E PE). Maintain BUY.
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