Essel Propack Ltd. (EPL) is primarily engaged in the manufacture of multi-layer collapsible laminated and plastic tubes.

The company has a dominant position in global oral care tubes segment with 36% market share and 7-8% market share in personal care tubes.

EPL operates across Africa Middle East and South Asia (34% of revenue), East Asia Pacific (24%), Europe (21%) and the Americas (21%). EPL has been strategic in its growth plans to circumvent revenue concentration risk.

The increasing use of laminated tubes over aluminum and plastic tube provides significant growth opportunities for EPL. Further, the use of aluminum foil in multi-layer tubes is expected to be restricted globally by 2025 and in India by 2022, which will further boost EPL’s sales.

Its increasing share of higher-value personal care tubes will help improve margins as market value of personal care is 3-4x that of oral care.

EPL’s global peers trade at an average P/E of 15x CY20E. In the last three years, the stock has traded at an average one-year forward P/E of 19x and there is more room for growth.

Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.

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