Revenue
Margin
Demand
Guidance
Tone
Metrics raised 1
- Revenue growth guidance raised to high teens for next few quarters (from early double digits)
Event Participants
Executives
4 Hemant Bakshi, M.R. Ramasamy, Deepak Goyal, Onkar Ghangurde
Analysts
7 Giriraj Daga, Jayesh Gandhi, Jaymin Shah, Pratik Oza, Sameer Gupta, Sanjay Jain, Sumant Kumar
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue growth | +25.3% YoY (reported); +20% underlying | Record performance; 5th consecutive quarter of double-digit growth. Reported growth includes pass-through of higher raw material prices; underlying excludes this impact |
| EBITDA | +15.2% YoY | 15th consecutive quarter of double-digit EBITDA growth; driven by pricing recovery and cost discipline |
| EBITDA margin | 18.8% reported; 19.6% underlying | Within target range despite unprecedented cost inflation; full cost impact recovered via pricing |
| PBT | +10% YoY | Growth on strong operating performance |
| PAT | -1.4% YoY | Decline due to lapping very low base year; expected to correct on full-year basis |
| ROCE | 18.5% | Maintained despite ahead-of-curve CapEx investments |
| Sustainable tubes mix | 44% of product mix | Continued progress on sustainability agenda |
| Personal Care & Beyond | 54% of portfolio | Increasing share of high-growth categories |
Geographic & Segment Commentary
- Beauty & Cosmetics: Growth exceeded 20%, maintaining its strong trajectory. Continued investment in front-end specialization and differentiated packaging supports long-term category leadership.
- Oral Care: Crossed 20% growth (24% YoY), a significant acceleration in this mature category. Gains driven by service quality, wallet share wins, and recovery across all regions.
- EAP Region: Led all regions with 34.3% growth, driven by strong BNC momentum and recent customer wins.
- Americas: Grew 29.4% with underlying margins better than reported (revenue includes pass-through pricing). Sequential margin dip reflects investments in Brazil and US capabilities, including split sales teams and outsourced high-capability items.
- Europe: Revenue grew 20.2% with continued strong growth trajectory, but margins impacted by identified operational challenges and growth investments (capacity expansion, printing capabilities, new technologies). Margins expected to progressively recover to mid-teens target as efficiencies improve.
- AMESA: Grew 17%, another quarter of double-digit growth across all regions.
Company-Specific & Strategic Commentary
- Indovita Merger: CCI approval received; transaction on track for planned timeline. Indovita Q1 FY27 (public data): volume +11%, revenue +25%, EBITDA +62%, margin 27% (+614 bps), EBITDA ~₹383 crores. Merger extends EPL into rigid plastic packaging (much larger TAM) and new emerging markets in Southeast Asia and Africa; highly EPS-accretive.
- Thailand Expansion: Operations ramping up with strong customer pipeline and recent MNC wins; significant BNC market expected to drive future growth.
- BNC Market Share Strategy: Current BNC market share at 8%, targeting doubling to 16%. Investments include full-service center of excellence in India, divisionalized front-end sales teams, and embellishment/decorations capabilities.
- Beyond Tubes Vision: Long-term ambition to become leader in consumer packaging in emerging markets; actively scouting acquisition opportunities across new formats and geographies, with strict growth and margin criteria.
- Innovation Recognition: Won ETMA Tube of the Year Award and FIPSA Awards for Responsible Packaging; also received IMC Ramakrishna Bajaj National Quality Award and recognized as one of India's Best Companies to Work For 2026.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue growth | High teens for next few quarters | Raised from early double digits; driven by sustained BNC momentum, oral care recovery, and Thailand ramp-up |
| EBITDA margin | ~20% underlying | Retained; pricing actions cover entire cost impact (raw material, freight, currency) with contracts on landed cost basis |
| PAT growth | Double-digit for full year FY27 | Q1 decline due to base effect phasing; PBT growth of 10% on track |
| Tax rate | 20-22% for FY27 | Within steady-state range of 18-22%; varies with country-level profitability mix |
Risks & Constraints
| Risk | Context |
|---|---|
| Geopolitical & trade volatility | Unparalleled external challenges including Middle East crisis affecting freight and currency. Management confident in pricing recovery model demonstrated in Q1, but environment remains dynamic and could pressure future quarters. |
| Raw material cost inflation | Full cost recovery achieved in Q1 through judicious pricing. High inflationary environment expected to persist; contracts on landed cost basis mitigate risk, but pricing lags and inventory timing create quarterly variability. |
| Europe operational challenges | Identified cost inefficiencies and transitional costs from manufacturing footprint optimization (Poland focus). Margins expected to progressively recover to mid-teens as scale benefits materialize. |
| Working capital pressure | Net debt increased ~₹180 crores in quarter driven by inventory (pricing effect + safety stock) and ahead-of-curve CapEx. Receivables quality solid with days under control; normalization expected as crisis subsides. |
| Merger completion risk | Indovita merger progressing well post-CCI approval but final approvals pending; timeline assumed in guidance. Management constrained from sharing non-public information until completion. |
| Tax rate variability | ETR range of 18-22% creates quarterly noise; FY27 guided at 20-22%, with Indovita consolidation post-merger potentially altering profile. |
Q&A Highlights
Working capital increase and net debt
- Question: Net working capital rose ~₹180 crores in the quarter vs ~₹170 crores for full FY26 - what drove this, especially receivables? (Sameer Gupta, IIFL Capital)
- Answer: Increase driven primarily by inventories - higher price of raw materials inflating inventory value and deliberate safety stock building to avoid supply disruptions. Also reflects ahead-of-curve CapEx investments. Receivables aging and quality remain solid, though AR value reflects pricing increase. (Deepak Goyal, CFO)
Europe margin contraction and manufacturing footprint
- Question: What are the transitional costs in Europe, and is the manufacturing transition to Poland complete? (Sameer Gupta, IIFL Capital)
- Answer: Europe delivered exceptional 20.2% revenue growth; operational challenges identified and receiving disproportionate focus, expected to resolve in coming quarters. Investments in Europe (capacity, printing, front-end, dyeing, tooling) are for long-term BNC growth and will deliver scale benefits. Manufacturing footprint remains Poland and Germany. (Hemant Bakshi, CEO; Deepak Goyal, CFO)
Guidance raise and PBT translation
- Question: With currency depreciation and inflation benefits on revenue, does PBT growth outlook also change? (Sanjay Jain, ICICI Securities)
- Answer: Guidance raised to high teens revenue driven by BNC momentum, oral care recovery, and Thailand ramp-up. PAT fully on track for double-digit full-year growth; Q1 softness due to effective tax rate and phasing. PBT grew 10%. (Hemant Bakshi, CEO)
M&A strategy beyond Indovita
- Question: What other opportunities beyond rigid plastic (Indovita) are being evaluated? (Sanjay Jain, ICICI Securities)
- Answer: Vision is to become leader in consumer packaging from emerging markets via three drivers: portfolio expansion beyond tubes, entry into high-growth markets, and transitioning from supplier to innovation partner. Indovita ticks all three boxes (larger TAM, SEA/Africa presence). Actively scouting further acquisitions targeting new formats or new markets with growth and margin criteria. Synergy details deferred until merger approval. (Hemant Bakshi, CEO)
Pricing pass-through and cyclicality-proof model
- Question: Was there inventory gain since prices moved sharply, and is the entire cost (raw material, freight, currency) recovered? (Sanjay Jain, ICICI Securities)
- Answer: Consumption costs reflect inventory holding, but pricing lag offset. Net-net, entire cost impact recovered in Q1 across raw material, freight, and currency (contracts on landed cost basis). Lessons from post-COVID crisis built strong cost-tracking, recovery mechanisms, and proactive customer engagement; business becoming cyclicality-proof. (Hemant Bakshi, CEO; Deepak Goyal, CFO)
Growth-enabling investments - OpEx vs structural cost
- Question: How to split between temporary growth-enabling investments vs structural additions to cost base? (Jaymin Shah, ARDEKO)
- Answer: OpEx growth in line with plan to grow BNC discontinuously - includes center of excellence in India, divisionalized front-end sales teams (separate BNC and oral/key accounts), and embellishment capability (some products still outsourced). CapEx ahead of growth curve. Underlying costs remain efficient; steady-state EBITDA should grow faster than revenue. (Hemant Bakshi, CEO)
Oral care and BNC category momentum
- Question: Which innovation/sustainability platforms are scaling fastest commercially? (Jaymin Shah, ARDEKO)
- Answer: Oral care grew 24% - exceptional vs normal high-single-digit; driven by wallet share gains on service quality during crisis. BNC is the strategic growth category with market share at 8% targeting 16%; all large BNC markets performed well. (Hemant Bakshi, CEO)
Americas profitability and sequential decline
- Question: Americas revenue stable sequentially but EBITDA/EBIT fell sharply - seasonality or more structural? (Sanjay Jain, ICICI Securities)
- Answer: Two reasons: reported revenue includes pricing pass-through (underlying margins higher than reported), and March/June margins not directly comparable. Investment in Americas capabilities (CapEx, sales team split, outsourced high-specification items) also weighing on current margins; underlying margins remain very strong. Normalization expected as revenue grows. (Deepak Goyal, CFO)
Tax rate guidance and merger impact
- Question: Historic tax rates 14-18%; this quarter above 20% - what is full-year guidance and impact of Indovita? (Jayesh Gandhi, Harshad H. Gandhi Securities)
- Answer: Steady-state ETR range 18-22%; FY27 guided 20-22%. Indovita PAT margin in line with EPL, making the merger EPS-accretive; consolidated tax rate commentary deferred until approval. (Deepak Goyal, CFO)
Key Takeaway
EPL delivered record Q1 FY27 performance with revenue growth of 25.3% reported (20% underlying ex-pass-through) and EBITDA growth of 15.2%, sustaining the 15-quarter streak of double-digit EBITDA growth. Underlying EBITDA margins held at 19.6% while fully recovering raw material, freight, and currency costs through pricing, and PBT grew 10% despite PAT declining 1.4% on base phasing. All regions grew double-digit, led by EAP at 34.3%, with Beauty & Cosmetics and Oral Care both exceeding 20% growth and BNC market share at 8% targeting 16%. Management raised revenue guidance to high teens, retained the 20% underlying margin target, and is progressing the Indovita merger (public Q1: revenue +25%, EBITDA margin 27%) toward completion, which will expand into rigid plastic packaging and new emerging markets. Key watch points include Europe margin recovery, working capital normalization (~₹180 crores inventory-led increase), and merger timing, with full-year PAT guided to double-digit growth on the current trajectory.