EPL conducted conference call on 09 February 2022 to discuss the financial results and performance of the company for the quarter ended December'21. Mr. Anand Kripalu – MD & CEO, Mr. M.R. Ramasamy – COO long with other senior management of the company addressed the call

Highlights of the Concall

• The company reported double digit revenue growth of 14.9% YoY to Rs 883.4 crore in Q3FY22 contributed by AMESA, EAP and Americas

• EBITDA margin declined during the quarter against previous year quarter due to steep increase in raw material prices, freight cost increase, lag in price pass-through, and higher employee absenteeism in certain geographies due to Covid

• Raw material prices continued to increase in Q3FY22 with slight softening seen at the end of quarter. LLDPE prices were higher by 40% in Q3FY22 compared to Q3FY21 while HDPE prices were up 29% over the same period

• The company continues to deliver double digit revenue growth and barring any unforeseen volatility, the company remains confident that margins have bottomed out and expect margins to recover going forward.

• The company added another customer VICCO in Q3FY22 for supply of recyclable tubes.

• The company has joined Ellen Macarthur Foundation's new plastic economy global commitment and has become signatory to United Nation's Global compact (UNGC) and also rated ‘B' management level by CDP (Formerly Carbon Disclosure Project) for climate change and water security.

• EPL plans to enter Brazil on the back of a long term contract from a global multinational company. Brazil is an attractive geography with large, emerging market (approximately 3.5 billion tubes) with consumption tailwinds. EPL expects to have dominant wallet share of their Brazil volumes. Around 60% of the market in Brazil would be oral care and balance 40% would be cosmetics and other areas.

• The company intends to set up a factory in Brazil but did not give specific details of investment.

• The company plans to take judicious price increases with second phase of price corrections to be realized in Q4 and contractual pass-through as per 3-month lag.

• The company plans to improve product mix with focus towards higher-profit segments and value-added offerings.

• The company is facing labour shortages in US market leading to higher labour costs. This problem is being faced by all other companies in US market.

• Europe market is also facing same problem as US market resulting in higher labour costs. Along with higher labour cost Europe is also facing topline challenge due to slowdown in personal care segment.

• AMESA (Africa, Middle East and South Asia including operations in India and Egypt) grew 36.9% in personal care, EAP (East Asia Pacific including operations in China and Philippines) grew 29.3%, AMERICAS (includes operations in United States of America, Mexico and Colombia) grew 15.1% while EUROPE (includes operations in United Kingdom, Poland, Russia and Germany) was down by 0.7%

• EUROPE is recovering in the personal care segment as seen from decline of 20% in Q1FY22, 4.4% in Q2FY22 and 0.7% in Q3FY22.

• Capex for 9MFY22 was Rs 222 crore. The company mentioned that it expects average capex of around Rs 250-270 crore in a block of 3-4 years.