Mehabe score: 6 G Factor: 2 Piotski Score: 5 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 5.
Description
EPL Limited (formerly known as Essel Propack Limited),is the largest specialty packaging global company, manufacturing laminated plastic tubes catering to the Beauty & Cosmetics, Pharma & Health, Food, Oral and Home.
Main Points
Increasing Global Footprints – # Epl is the global leader in the laminated tubes packaging and they are number one global speciality packaging company and Every 1 in 3 toothpaste package is manufactured by the company.Site:EPLMain Symbol:EPL
Stock trades at 266.0, above its 50dma 257.15. It also trades above its 200dma 238.7. The stock remains bullish on techicals
The 52 week high is at 318.75 and the 52week low is at 182.10
Price Chart
P/E Chart
Sales and Margin
Strengths
– has been maintaining a healthy dividend payout of 41.60%
Weakness
– The company has delivered a poor sales growth of 7.76% over past five years.
– might be capitalizing the interest cost
-Promoter holding has decreased over last 3 years: -5.23%
Competition
– The industry trades at a mean P/E of 16.9x. EPL Ltd trades at the industry’s max P/E of 33.55x. EPL trades at a P/E of 33.6x
– Industry’s mean G-Factor is 5.4 while the mean Piotski score is 9.0. EPL has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is 9.3%. The max 1- month return was given by Cosmo Films: a return of 23.88 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 810.0 cr compared to Rs 690.0 cr for period ended Mar 2020, a rise of 17.4%
Operating Profits reported at Rs 140.0 cr for period ended Mar 2021 vis-vis 138.0 for period ended Mar 2020 .
Operating Margins contracted -271.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.8 compared to Rs 2.25 for previous quarter ended Dec 2020 and Rs 1.54 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 3092.0 cr for period ended Mar 2021 vis-vis sales of Rs 2760.0 cr for the period ended Mar 2020, a healthy growth of 10.7%. The 3 year sales cagr stood at 8.5%.
Net Profit reported at Rs 239.0 cr for period ended Mar 2021 vis-vis sales of Rs 207.0 cr for the period ended Mar 2020, rising 13.4%.
Company recorded a healthy Net Profit CAGR of 11.6% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 522.0 cr for period ended Mar 2021 vis-vis Rs 488.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 16.0% compared to 15.0% over the last 3 Years. – The stock has given a return of 36% on a 1 Year basis vis-vis a return of 33% over the last 3 Years. – The compounded sales growth on a TTM bassis is 12% vis-vis a compounded sales growth of 8% over the last 3 Years. – The compounded profit growth on a TTM basis is 17% vis-vis a compounded profit growth of 13% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 14.94% vis-vis 13.79% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 19.62% vis-vis 18.7% for Dec 2020
Conclusion
– has been maintaining a healthy dividend payout of 41.60% – The company has delivered a poor sales growth of 7.76% over past five years.
– might be capitalizing the interest cost
-Promoter holding has decreased over last 3 years: -5.23%
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 257.15 and is trading at 266.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
