February 09, 2017 / 15:10 IST
Essel Propack (Essel) in its 3QFY17 delivered revenue growth of 17% YoY due to inclusion of 100% of the profit and loss of EDG, which was acquired effective 30th Sept, 2016, supported by good revenue growth by Mexico. However, 3QFY17 witnessed contraction in EBITDA margin by 161 bps YoY, due to sharp decline in Indian operations post demonetization, one off expenses due to consolidation of India and Columbia units and impact of full consolidation of EDG.
OutlookEssel is working in sync with its long term strategy to increase revenue share of high margin Non-Oral care business. Going forward, demand revival in India, synergies from EDG acquisition and continued increased focus on non-oral care segment (mainly cosmetics, beauty, and pharmaceuticals) will result in expansion in EBITDA margins. We estimate Essel to post earnings CAGR of 16% over FY16-18E. We maintain BUY on the stock with revised target price of Rs 272, valuing the company at 15x FY18E EPS.
For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 
Read More
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
