Buy EPL; target of Rs 270: Motilal Oswal

Motilal Oswal is bullish on EPL recommended buy rating on the stock with a target price of Rs 270 in its research report dated July 17, 2023.

Broker Research

July 18, 2023 / 18:54 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on EPL

EPLL’s operating performance in the recent quarters (till 2QFY23) have been muted, due to a combination of sluggish demand and rising costs owing to inflation. However, since 3QFY23, the company’s operating performance improved, led by demand revival and softening of raw material and energy prices. Going ahead, we expect EPLL to register earnings growth, further aided by incremental revenue from Brazil. EPLL has tapped into the Brazilian market (accounting for ~8.3% of its global market of ~USD6.2b) by strategically building facilities in close proximity to key demand areas in the region to gain competitive edge. We expect Revenue/EBITDA of ~INR1.35b/INR0.3b from the region in FY25. EPLL’s sustainable tubes are gaining market prominence, driven by robust demand. This is evident from a significant volume growth of ~2.5x YoY in FY23. The company expects this upward trend to continue, with volumes projected to double in FY24. Sales contribution from innovations stood at 12% in FY23. Margins across geographies are expected to improve going ahead, on the back of demand revival in EAP/Europe, easing of raw material and energy prices, and price hikes implemented by the company.

Outlook

We reiterate our BUY rating on EPLL with a TP of INR270, valuing the stock at 21x FY25E EPS. (i.e., ~11% discount to the last five years average of ~24x).

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