Key Highlights

Non Oral Care category stood at 41.8% of total sales for the year ended FY'16 as compared to 41.2% for FY'15. Non Oral care grew only in EU and in China while for the rest of the markets the growth was in negative side. China saw a non oral care growth of nearly 25% in Mar'16 quarter.

In India, the non oral care revenue share stood at 48% and de grew in FY'16. After 3 consecutive quarters of lower growth in India, the non oral care showed some trajectory of growth in Mar'16 quarter. Slowing Indian economy is the major reason for that. Some business plans on Pharma sector got delayed by the customers due to FDA and other regulatory issues. So while Essel was able to add more clients in non oral care market in India, overall due to lower volumes in Pharma sector, the expected growth did not happen. Further in cosmetics business also there was some deferment by clients due to overall slowdown in the economy and thus, the non oral care share in the overall revenues did not grow as anticipated by the management.

As per the management, new customer wins have happened in India which should help growth going forward.

Full ramp up of new non-oral care facility in China will help revenue growth going forward further in China.

Management remains confident of a 50% share of non oral care in total sales in next 2 years.

Raw material cost is more or less a pass through for the company.

In Columbia, the company is expanding the capacities as there is a huge opportunity for exports to neighboring countries in FY'17.

In Egypt the contracted volume from MNC in oral care segment was lower in FY'16, due to disturbance in region in Libya and Egypt and there was uncertainty in demand and thus resulted in lower offtake on YoY basis. However, the customer has once again started lifting the offtake as desired.

US will focus on new laminate based tube solutions for Beauty & Cosmetics. Non oral care revenue share improved 2.1% for the year to 29.6%.

Mexico turnaround has happened since October 2015 with improved volume negotiated with the key customers.

The PBIT margin of EU is still in single digit, as EU had not reached the economies of scale that its required for higher margins. As per the management, there is a plenty of scope for improvement of margins in EU, if the volumes come in. Opportunities in non-oral care category and capabilities in place both for laminated and plastic tubes should drive further growth in EU.

Average interest rates stand around 7.4%.

Barring any inorganic growth, management expects capex of around Rs 130 crore for FY'17.

Overall for FY'17 management expects around 12-15% sales growth and around 20% bottom line growth.