Motilal Oswal's research report on EPL
EPLL reported a healthy operating performance in 2QFY25. EBITDA grew 22% YoY, led by Europe (up 2.1x YoY), followed by the Americas (up 59% YoY; ramp-up of Brazil). However, EBITDA for AMESA declined ~6% YoY (due to negative pricing YoY in India), while EAP grew marginally by 3% YoY. A strong margin recovery in Europe and the Americas is expected to sustain, aided by measures such as manufacturing realignment in Europe (shifted plant from Germany to Poland), robust performance in Brazil (added three new MNC clients to date), and a better product mix (increasing mix of personal care and beyond).
Outlook
Factoring in a strong performance in 2Q, we increase our FY25E earnings by 5% and broadly maintain our FY26 estimates. We value the stock at 20x Sep’26E EPS to arrive at our TP of INR315. Reiterate BUY.
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