Fundamental Analysis

ESSEL PROPACK LIMITED 

Ticker : 500135
BUY: Rs 179.70
Target: Rs 200

Essel Propack Limited (EPL) is a producer of plastic packaging material in the form of multilayer collapsible tubes & laminates, used primarily for the packaging of toothpaste, personal care, cosmetics, pharmaceuticals, household and industrial products. On a consolidated quarterly front, the net sales were reported at Rs 710.83 crore in Q3FY20, growing by 2.36 per cent to Rs 694.43 crore in Q3FY19. The company reported an operating profit of Rs 162.03 crore in Q3FY20, which grew impressively by 20.4 per cent over Rs 134.58 crore reported in Q3FY19. Similarly, net profit was reported at Rs 61.81 crore in Q3FY20, up by 34.9 per cent from Rs 45.82 crore reported in Q3FY19. EPL is set to benefit from various expanding measures as well as efforts to improve its product mix, across geographies over the last two years. Operating leverage benefits are likely to kick in with ramp-up of operations, particularly in America and Europe. Thus, we recommend a BUY.