EPL shares skyrocket 14% to multi-year highs on Q1 results

In the last one year, EPL stock has risen 20 percent. In comparison, benchmark Nifty's rose 25 percent during this period.

Shares of specialty packaging company EPL Limited - formerly known as Essel Propack - zoomed around 14 percent to hit a multi-year high of Rs 252.90 on the National Stock Exchange (NSE), following strong June quarter show by the the specialty packaging company.

The company's adjusted PAT jumped 18 percent on year to Rs 64.2 crore, and consolidated revenue rose 11 percent YoY to Rs 1,007 crore during the June quarter.

EPL's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) rose 17 percent YoY to Rs 190 crore, while EBITDA margin improved by 90 basis points YoY to 18.4 percent, driven by stronger margins in the Americas and Europe.

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The packaging firm noted encouraging margin improvements and aims to reach a 20 percent margin soon. It is focused on enhancing margins in EU and India, and expects Q1 gross margin to be sustainable.

EPL said that margins in the Africa, Middle East, South Asia (AMESA) region were impacted by higher investments to boost performance and future growth, which will improve as sales rise. Egypt is unlikely to weigh down AMESA’s performance going forward, EPL added.

Following the results, Motilal Oswal reaffirmed its 'Buy' on EPL with a target price of Rs 275 per share. MOSL foresees robust sales growth and margin expansion for EPL, driven by cost rationalization, margin improvement in Brazil, and operating leverage.

At 2:33 pm, EPL shares were trading over 11 percent higher at Rs 240.57 on NSE. In the last one year, the stock has risen 20 percent. In comparison, benchmark Nifty's rose 25 percent during this period.