Multibagger EPL stock gains over 8% to reach 11-month high, up 22% since April. Good time to buy?

Shares of EPL, a starring planetary specialty packaging company, continued their upward inclination for the 2nd consecutive trading league connected Tuesday, gaining 8.5% intraday to scope a 11-month precocious of ₹219 per share.

Since April, the banal has maintained beardown growth, achieving a 22% summation to date. Despite this, it remains astir 32% beneath its highest of ₹318.60 per share, acceptable successful August 2020. The shares were impacted by the driblet successful the company's fiscal performance.

However, the caller rally successful stock terms is expected to persist arsenic the institution is seeing a beardown request for its products, driven by robust involvement from a divers scope of customers, including some ample multinational corporations and section clients.

According to Systematix Institutional Equities' latest report, EPLL's operations successful Brazil are reporting beardown EBITDA margins, capitalising connected its unsocial presumption arsenic the sole strategical planetary conduit supplier successful a important user market. This marketplace beingness includes planetary customers, enhancing its strategical advantage.

With expanding lawsuit request for proximity to manufacturing locations, EPLL's Brazil installation is poised for important growth. The institution remains optimistic astir maintaining beardown margins, foreseeing Brazil arsenic a cardinal contributor to wide EBITDA borderline enhancement. It anticipates ongoing opportunities successful Brazil, highlighting important imaginable for maturation period by month, said the brokerage.

Systematix emphasises the company's semipermanent strategy focused connected achieving profitable maturation done 4 cardinal initiatives: accelerating enlargement successful quality & cosmetics, and pharmaceuticals, expanding marketplace stock crossed cardinal regions, starring successful sustainability to animate lawsuit adoption and driving multi-year projects to substance sustained growth.

The planetary tubes market, valued astatine $42 cardinal successful 2023, sees EPLL arsenic the largest shaper with a 20% marketplace share, producing implicit 8 cardinal tubes annually. Specifically, EPLL holds a 10% stock successful the $22 cardinal beauty, cosmetics, and pharmaceuticals segment, a 35% stock successful the $17 cardinal oral attraction market, and an 8% stock successful the $3 cardinal food, home, and concern segment. Major customers see Colgate, P&G, L’Oreal, and Unilever.

The brokerage notes EPLL's palmy initiatives specified arsenic restructuring successful Europe, improving merchandise mix, strategical pricing management, and outgo optimisation, each contributing to borderline enhancement and bolstering assurance successful achieving its targeted 20% EBITDA borderline for FY25.

It projects revenue, EBITDA, and PAT CAGR of 12%, 18%, and 42% implicit FY24–26E, respectively. The brokerage maintains its 'buy' standing with a people terms of ₹264 apiece based connected an unchanged 20x FY26E P/E ratio.

EPL is the world's largest specialty packaging company, specialising successful the manufacture of laminated integrative tubes for a wide scope of industries specified arsenic beauty, pharma, food, oral care, and location care.

Between CY12 and CY20, the company's shares experienced a sustained upward rally, delivering an awesome instrumentality of astir 1900%.

Disclaimer: The views and recommendations fixed successful this nonfiction are those of idiosyncratic analysts. These bash not correspond the views of Mint. We counsel investors to cheque with certified experts earlier taking immoderate concern decisions.