Accumulate Essel Propack; target of Rs 155: CD Equisearch

CD Equisearch's research report on Essel Propack

The boom in the global packaging sector hinges on both the growth in the global economy as well as the performance of the diverse range of industries that this sector caters to – pharmaceuticals, food & beverages, cosmetics, and other consumer goods. Additionally, exponentially expanding e-commerce market and rising demand for packaged foods have a direct bearing on the packaging sector. The FMCG business across categories of Beauty and Cosmetics, Foods, Homecare and Oral care constitutes a multitrillion dollar market globally and continues to grow in many different ways. In the developing economies, growth is powered by increasing young population, growing disposable income, lifestyle changes etc.

Outlook

Weighing odds, we advise accumulating the stock with the revised target price of Rs 155 (previous target Rs 140 (adjusted for bonus)) based on 20x FY21e EPS of Rs 7.76 over a period of 9-12 months.