Buy EPL; target of Rs 300: Motilal Oswal

Motilal Oswal's research report on EPL

EPL reported an EBITDA of INR2b (+10%YoY) in 3QFY25, below estimates due to lower-than-expected performance of AMESA (down ~9.5% YoY) and EAP (~down 2.9% YoY), primarily driven by the slowdown in the Indian market and currency depreciation in Egypt, respectively. The Americas and Europe grew by 30% YoY and 2.2x YoY, respectively Strong margins in Europe and the Americas are expected to sustain, supported by cost optimization, an improving sales mix, and a robust demand scenario in Brazil, which is leading the company to fast-track its capacity addition plans in the region. We broadly maintain our estimates for FY25/FY26/FY27 and value the stock at 18x FY27E EPS to arrive at our TP of INR300. Reiterate BUY.

Outlook

We expect a CAGR of 9%/15%/27% in revenue/EBITDA/adjusted PAT over FY24-27. We value the stock at 18x FY27E EPS to arrive at our TP of INR300. Reiterate BUY.