Essel Propack Complete Fundamental Analysis and Future Outlook
Essel Propack is the part of the Indian business conglomerate Essel Group, with headquarters in Mumbai. The company is the largest global speciality packaging company in the world. It operates in five major packaging segments namely Beauty and Cosmetics, Pharma and Health, Food, Home and Oral care.
- The company is focused on developing innovative packaging solution for more than 400+ companies across the world.
- Essel Propack is one of the only two global players in the tubes manufacturing space, and it is the world’s the largest manufacturer of laminated tubes.
- The company is also the market leader in Oral care tubes with a global volume share of 36%. Some of their biggest clients include Colgate, Johson & Johnson, P&G, L’Oreal etc. The international sales account for approximately 70% of the total revenue.
- The company is also spending a large amount on research and development which gives them a competitive advantage and operational efficiency in the packaging industry.
I have evaluated the company on 10 fundamental categories and each has been given a rating out of 5 stars. From this, I have arrived at a combined stock rating for the company.
This is the summary of the analysis. For details check the source link.
Source: Essel Propack Shares Fundamental Analysis and Future Outlook
Some insights for the coming years from management discussion & analysis (MD&A) and con calls are as follows.
- The impact on consumption in Oral care, Cosmetics and Pharmaceuticals due to the COVID-19 outbreak is mostly due to the supply chain problems and not the demand. The impact is estimated to be in double digits and is only temporary. Therefore Essel Propack can see a stable growth after the situation clears.
- The company is looking forward to further expansion in the US market especially in the Cosmetics and Food packaging categories. They are targeting more than 50% revenue from non- oral care packaging.
- Given the acquisition of Essel by Blackstone, the company is on its clear path of value creation due to prudent capital allocation and enhanced corporate governance.
- The company is focused on deleveraging and this will improve the EBT and net income margins further in the coming years. This means increased profitability for the company.
The company has new management and controlled by a private equity player Blackstone which indicates improved governance. Also, the company has some promising growth prospects in the future. Overall this makes it a good investment for a long term holding period.
Join my Telegram Channel
Subscribe to my Blog: Subscribe — Billion Dollar Valuation
