Target price: Rs 98.00
- Essel Propack Ltd. (EPL), which was previously Essel Packaging, belongs to the Subhash Chandra group and was incorporated in 1982.
- It commenced commercial production in 1984. Today, it is recognised as a manufacturer of fully laminated tubes, co-extruded seamless tubes and laminates, in India, as well as overseas. EPL has been awarded the ISO 9002 certification for its manufacturing and marketing operations.
- I expect margin improvements in the laminated tubes, plastic and especially in packaging segments. A 30 per cent growth is expected in plastic tubes in CY07E.
- I expect revenue in the quarter of December, i.e. CY06E of Rs 3 billion and profits of Rs 312 million. At the current market price, the shares trade at 8.1x CY08E EPS.
- I recommend a ‘Buy’ on the stock with a price target of Rs 98.
