EPL Limited (NSE: EPL) Q1 2026 Earnings Call dated Aug. 05, 2025
Corporate Participants:
Unidentified Speaker
Pratik Tholiya — Moderator
Anand Kripalu — Managing Director & Global Chief Executive Officer
Deepak Goyal — Chief Financial Officer
Ramasamy — Chief Operating Officer
Analysts:
Unidentified Participant
Sameer Gupta — Analyst
Sanjesh Jain — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the EPL Limited Q1FY26 earnings conference call hosted by Systematic Group. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please sign an operator by pressing star then zero on attached in form. Please note that this conference has been recorded. I now hand the conference over to Mr. Pratik Toria from Systematic Group for his opening remarks. Thank you. And over to you sir.
Pratik Tholiya — Moderator
Yeah. Thanks Ms. Kant. Good evening everyone. On behalf of Systematics Institution Equities I would like to welcome all the participants who logged into this conference call of EPA Limited to discuss the first quarter results. On the management side we have Mr. Anand Sipalu MD and Global CEO Mr. Emma Ramadani COO Mr. Deepak Goyal, CFO Mr. Shri Hadi Rao, President MSR Region. Mr. Omkar Gangude, Head Legal Commissary and Compliance Officer. At the outset I’d like to thank the management for giving us the opportunity to host this call. I would like to now like to welcome Sir Anand Sipali to start the proceedings of the call.
Thank you. And over to you sir.
Anand Kripalu — Managing Director & Global Chief Executive Officer
Thank you very much Prateek and hello everybody. Very good evening to you and thank you for joining us for EPL’s Quarter 1 FY26 earnings call. I am delighted to share that we have had a strong start to the financial year with solid progress across all our key metrics. We have delivered double digit revenue growth of 10%. Robust EBITDA growth of 18.1% and very strong PAT growth of 55.8%. Our EBITDA margin has expanded to 20.5% improving by 140 basis points over the previous year. We delivered an ROCE of 18.9% improving by 299 basis points as compared to last year.
This performance is a result of consistent execution, clear strategic direction and operational discipline. Our Consolidated revenue grew 10% driven by strong double digit growth in three of our four regions. Europe grew by 15%, Americas by 13% and EAP by a solid 10%. Through effective execution and robust beauty and cosmetics growth. And Nissa’s growth however was modest at 1.7%. Amidst macroeconomic headwinds and sluggish FMCG demand. We had another quarter of very strong beauty and cosmetics performance with 35% year on year growth. Reflecting the continued success of our strategic focus on this category, EBITDA margin expanded to 20.5% delivering a robust growth of 18.1% versus the previous year.
This represents the 12th consecutive quarter of margin expansion underpinned by sustained double digit ebitda growth and four successive quarters of 20% plus margins. Europe and the Americas delivered significant margin improvement driven by strategic interventions and structural cost actions. ANISSA and EAP continue to operate within the target margin range supported by disciplined execution. Underlying PAT grew 55.8% during the quarter and and EPS improved from 2.02 per share in Q1 FY25 to 3.13 rupees per share this quarter. Strong EBITDA and PAT performance combined with solid cash flow generation have helped improve our net debt to ebitda ratio to 0.45 with the ROP improving to 18.9%.
Sustainability remains central to our growth agenda this quarter. Sustainable cube formats contributed 38% of total sales reflecting growing customer adoption and the impact of our product innovation efforts. EPL received the topmost A rating in the Supplier Engagement Rating category by cdp, making the third consecutive year the company has retained this distinction in the category, a testament to our consistent leadership in driving sustainability across the entire value chain. As we look ahead, we have plans in place to build and sustain double digit revenue growth with strong operating margins through focused execution combined with strategic clarity. Our priorities remain 1.
Strong momentum in Beauty and Cosmetics we are seeing continued success in our beauty and cosmetics segment with strong double digit growth. Neoceam continues to gain traction for its seamless finish while enhanced printing and investments in extruded tubes are further strengthening our offering as oral growth gradually comes back over the next quarters. High growth momentum in this segment will help us deliver sustained overall double digit revenue growth. Second Scaling Presence in High growth Markets we are scaling up well in high growth markets with the Brazil capacity expansion now live and delivering ahead of plan. This not only strengthens service to our key accounts but has also enabled us to add several new customers in the region.
The Thailand greenfield is progressing as per timeline and will start contributing in the second half of the year. Third Sustainability as a commercial differentiator our sustainable tube mix has risen to 38% driven by close collaboration with customers to co develop recyclable and PCR formats. This is helping us gain wallet share and strengthens our position in competitive bids. We see continued momentum here with with further tailwinds expected as large brands accelerate their sustainability commitments and finally the fourth margin expansion and improved capital efficiency. We are seeing encouraging momentum on margins across regions, Americas and Europe continue to benefit from building the right structure along with focused execution, better product mix and cost actions.
We have already mitigated the impact of earlier US tariffs and are now evaluating the implications of the recent ones. Importantly, we manufactured in the US to sell in the US and while we import laminate into the US with contractual pass through arrangements in place, we expect the impact to be immaterial. In India, despite macroeconomic headwinds, margins remain strong. The business is now back within the target margin range supported by steady operational improvement and sharper commercial focus. At the same time, we are maintaining strict discipline on capital allocation, interest costs and working capital. This approach is helping us improve returns as well as efficiency.
As a result, we are well poised to deliver fast growth ahead of revenue and further improve ROC in the foreseeable future. We are very pleased with the strong start to the year and the momentum across our priorities. With disciplined execution, customer focus and a clear strategy, we are well positioned to deliver consistent growth so as to create long term value for all our stakeholders. With that, we will now open up the line for questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question may press star and one on the touchdown telephone. If you wish to remove yourself from question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, wait for a moment while the question queue ascends. The first question is from the line of Sameer Gupta from India Infoline. Please go ahead.
Sameer Gupta
Hi, good evening and thanks for taking my question. Firstly sir, if I look at Amesa now, growth has been subdued for four consecutive quarters. And if I look at, you know, the FMCG companies, particularly in oral care there the weakness typically has started only from last quarter onwards. Also last quarter you mentioned that the growth was impacted here because of lower intercompany laminate sales. Just wanted to understand the weakness in Amesa in terms is it just oral care? Are there other factors? And going forward when do you expect recovery? Any change which is visible on the ground currently?
Anand Kripalu
So let me say as far as India is concerned, this quarter as well. Our cube revenue growth is higher than the overall revenue growth that you are seeing, right? So there is some amount of correction in terms of laminate inventory now. More specifically there has been softness in oral care volumes. But what has started happening is that we have seen accelerated momentum in beauty and cosmetics, right? And that is helping our overall numbers now Oral the way we see it, I think we are beginning to see some signs already of recovery of oral volumes. And as oral volumes start coming back with sustained beauty and cosmetics momentum for which we have put in a lot of effort and we are seeing the results, when that starts happening, we should start seeing MSR overall growth numbers beginning to improve.
Sameer Gupta
Got it, sir. And when do you expect MSR in terms of oral care to, you know, start clocking respectable growth in terms of, let’s say mid to high digit, single digit kind of a number?
Anand Kripalu
You see, the indication we have from our key customers is that they are seeing recovery and H2 is expected to start bouncing back. Okay, so if I were to just read that, marry that with our accelerated momentum on bnc, I think that’s when we should begin to start seeing improved numbers. But you know, while I answer this question to you, I just want to say this, that we know that there has been some softness in the overall FMCG environment in India. I think the strength of our portfolio is that we have delivered double digit growth in three of the other regions.
So I think the strength of our portfolio is that we are able to manage one off slowness that could happen anywhere in the world but with success in other parts of the world so that we overall deliver double digit growth, which indeed we’ve done. So I think for me the confidence is that our portfolio is coming to play that we’re not a victim of only some softness in one region, but we can still deliver the overall ambitions that we have for this business.
Sameer Gupta
Got it, sir. That’s very helpful. Just a bookkeeping question. Tax rate again this quarter has been on the lower side. Last year also was low. Any guidance that you can give as to what you expect for the full year?
Deepak Goyal
Yeah. So Sameer, as I’ve mentioned, the tax rate in the quarter could get impacted by the mix of profit in various countries. I expect steady state tax rate will continue to be in 18 to 20% range. However, it can go up and down depending upon how the mix of the profit has come in.
Sameer Gupta
Got it. And this is still for the full year you expect and not for the remaining quarters.
Deepak Goyal
The 18 to 20% number.
Sameer Gupta
Yeah.
Deepak Goyal
Yeah. So I would say that depending upon the mix in low tax geographies, this year tax rate could be a bit lower than the steady state rate. The steady state rate will be about 80 to 20%.
Sameer Gupta
Got it. Deepak, that’s helpful. I’ll come back in the queue for any follow ups. Thanks and all the best.
Anand Kripalu
Thank you.
operator
Thank you. The next question is from the line of Sanjay Jain from ICIC Securities. Please go ahead.
Sanjesh Jain
Good evening. Sir, thanks for taking my question. I got first question on the personal care. Very strong performance, 28% YoY growth on a decent base. I think, I think can you help us understand what is driving such a strong and sudden uptick in the growth for personal care? And do you think these run rate are sustainable at least for next 12 months?
Anand Kripalu
So you know we have been talking about the efforts we are making as a business on beauty and cosmetics or indeed personal care. And we’ve been talking about it for the last year or so. Right. Since then, I will say that the execution of our plan has now permeated across the organization around the world. So for instance, we have seen very aggressive customer acquisition. Our innovation is beginning to show results, particularly neocene that we were talking about. Okay. We have invested in people and importantly in back end capability which is both to do with ring fencing capacity as well as agility to deliver timelines for smaller MOQs which are far better than what we ever were doing in the past.
Okay. And finally I must tell you that we are also hungry today for M and day in the beauty and cosmetics space. And we are actually hunting down opportunities in B and C around the world now. I think everything that we have put in gives me confidence that you will see a new momentum on beauty and cosmetics. Last quarter we were about 20% growth. This quarter with beauty and cosmetics we have 35% growth. I think you should continue to see solid momentum in beauty and cosmetics. Looking ahead.
Sanjesh Jain
And when you say mma, will it be going more into the non laminate segment or. Or it will be more geographical. How are we looking at M and A?
Anand Kripalu
I mean it could be both. Honestly, Sanjay, it could be geographic. Right. So regions where we are relatively under indexed in terms of our share. Right. We can transform our business with the right kind of M and A. And I would say selectively in markets which are predominantly excluded markets, we may look at extruded manufacturers as well. So we will stay in the space of tubes. We will stay in the space of plastic tubes that could be laminated tubes or extruded tubes and then it’s based on what’s available. But all I can tell you is that we have a strategic approach to scanning the market and zeroing in on opportunities.
We’ve actually signed a few NDAs where we are doing some work to explore. But obviously we will share more information when we are able to share that information. I think the bigger message is that we have always said that BNC is the big growth opportunity for this business. BNC is where we have relatively low shares compared to oral care. And honestly, that’s where a huge amount of management effort is going. And adding to that, we will also put money on the table if we have the right targets to acquire so that we can sustain strong beauty and cosmetics performance.
Sanjesh Jain
That’s clear on Europe segment. I could understand America adding to the growth, but what’s driving Europe growth so strong?
Anand Kripalu
I mean, what is. I think Europe looks so strong in the sense that, you know, so you know, you know that we have seen some years of sluggish performance in Europe. Right. We made certain key changes. We have put certain structural interventions in place. We have beefed up our sales resources. We actually have a new head of sales as well. And I think all that put together is beginning to deliver value for the business. Okay. And therefore we are also exploring possibilities of M and A in Europe as well to be able to actually step change our position in Europe.
And I would just add, Anand Singh, that in Europe our market share is relatively very small and hence our ability to gain market share with good service levels goes up significantly. So despite, let’s say inherent category growth, which may be slower than the global growth in Europe, opportunity for us remains very high.
Sanjesh Jain
But opportunities always existed. Right, Deepak?
Deepak Goyal
And that is what Anand is mentioning, Sanjay, that we were not able to capitalize on that opportunity for two reasons. Number one, our profit structure, the PNL structure was not optimal. Our margins were suboptimal and hence a lot of focus always went on fixing the cost base rather than growing the region. And second, some of the organization level changes that we did last year. So we have been able to fix both of those issues in last 12, 15 months and the results we are showing in the numbers now.
Sanjesh Jain
That’s it. That’s it. One question, Anand. On your initial comment you said that we have winning more labels. Can you give more color how many more labels we have won? What is the contribution in the growth which is coming from the new customer? That would be helpful.
Anand Kripalu
You’re saying how much growth are we getting to new customers?
Sanjesh Jain
Yeah.
Anand Kripalu
No, so I don’t have. Sorry.
Sanjesh Jain
That is one of the drivers for BMC growth, right?
Anand Kripalu
Oh, that absolutely is one of the drivers. And we are going after a large number of smaller customers. Okay, if you look at just India, there is a table in front of me here with samples of cubes from all kinds of brands and a large number of them are D2C brands, online brands. I don’t know. Do we have the number? See, Sanjeev.
operator
I’m sorry. To interrupt. The management line has been dropped. It. Please wait until we connected the management. We have connected the line of management. Yes, sir, go ahead.
Deepak Goyal
Okay. Sanjish, can you hear us now?
Sanjesh Jain
Yeah, we can hear you.
Deepak Goyal
Thank you, Sanjesh. The beauty and cosmetics growth is driven through innovation across both the existing customers and new customers. As we are explaining and demonstrating our capabilities to our existing customers, we are gaining new projects from them. And equally we are aggressively acquiring new customers. We don’t have the number right now, but this is. The growth is driven by innovation and that is why our confidence in sustaining BNC growth even in the future remains high.
Sanjesh Jain
Got it. That’s clear. I think these were my questions and thanks for answering them so patiently. And best of us for the coming quarters.
Anand Kripalu
Thank you.
operator
Thank you. The next question is from the line of Smith Kala from rsp. Please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity. The first question was regarding the recent strategic investment by indorama. So wanted to understand will this investment be helping us collaborate with them on takeoff strategy?
Anand Kripalu
So I mean, I think the answer is yes. As an example, our Thailand project is done with a lot of support from indorama. In fact, our unit is being set up on the indorama premises, of course, with all these arm length checks and balances in place. So that’s how we are able to get off with great speed. And we’re also getting a lot of their support for getting all the licenses and approvals and so on and so forth that we need. Now that’s a first example of where we have leveraged indorama resources and we are continuously exploring other opportunities around the world.
Unidentified Participant
Okay, that was helpful. Secondly, just wanted to understand more on the top line and the EBITDA and the bottom line guidance.
Anand Kripalu
So what would you like to understand?
Unidentified Participant
The double digit growth of top line, can it be bettered or we will maintain that double digit guidance of top line?
Anand Kripalu
No. So we have given a guidance to say that our ambition is to deliver double digit growth with EBITDA growing faster than revenue and PAT growing faster than ebitda. Okay. So that guidance stays. It’s not a quarter to quarter guidance but in a kind of full year guidance. Okay. And I think what I’ve been saying is that we’ve delivered double digit growth in a quarter where MSR has been soft and oral has generally been soft. Right. We have seen long term trends on oral. Right. And you know, this company has been built on oral and we have seen long term growth in oral and therefore toothpaste is not a category that disappears.
People don’t stop brushing, to put it simply. And therefore some of those trends are short term. When those come back with the ambition, with the growth that we have been able to establish with beauty and cosmetics, we absolutely believe that we will be squarely in the double digit zone.
Unidentified Participant
Okay, thank you. That was helpful. That’s all from myself.
Anand Kripalu
Thank you.
operator
Thank you. A reminder to the participants, you may press Star and one to ask question. The next question is from the line of Oja Jane from Trinidad Assets Management. Please go ahead.
Unidentified Participant
Hello. Thank you for the opportunity. So I have a follow up question on Indirama’s. Like the stake. So what would what was the vision for in getting this strategic investor on board and will they be increasing their stake in the future or taking up a more active role?
Anand Kripalu
So I don’t have a really answer to your latter question. Honestly, what was. See the point is that a strategic investor will take a long term view of a business. A private equity firm will have a five year, six year horizon. So I think the purpose of a strategic investor is that decisions should be taken in the fullness of time to create long term value for all stakeholders and to drive long term transformational growth for this business. Now I’m conjecturing, but that is my understanding of the role of a strategic investor versus a private equity investor.
Unidentified Participant
Okay, understood. And I also wanted to know the Brazil greenfield facility that had gone live last year. Can you please tell me the update on its current utilization levels and how much it’s contributing to the revenue?
Anand Kripalu
So as far as Brazil is concerned, so I would say our utilization has been high. As a consequence of that, we have doubled our capacity in beauty and cosmetics in Brazil as we speak. That fully came on stream in June and we have now started really accelerating our beauty in cosmetics business. So I think you want to believe that the utilization was high enough for us to take a decision to put another slug of investment into Brazil. Overall, I would say that we are delighted with our performance in Brazil and particularly since a lot of the growth momentum is coming in beauty and cosmetics in Brazil and it’s making a big difference to our overall global performance as well.
Unidentified Participant
Yeah, all right, that clears it up. That’s all from my side. Thank you so much.
Anand Kripalu
Thank you.
operator
Thank you. A reminder to all the participants, you may press Star and one to ask questions. The next question is from the line of Anupam Jean from India Securities. Please go ahead. Can you speak little louder please? Yes, sir.
Unidentified Participant
So my question is what will be the contribution from Thailand capacity once it ramps up in H2.
Anand Kripalu
So we are not specifically giving a number on that. All I will say is that the whole plan on Thailand is to actually start small but accelerate very fast. All right. Because the model in Thailand is a little different from our model of expansion to other geographies where it’s been done on the back of a customer contract. In Thailand, we have a very strong pipeline of products, particularly in the beauty and cosmetics space. So what we’re doing is we’re getting started quickly and as the business comes in, our aim is to ramp up very fast.
So I would say that the contribution of Thailand will keep increasing, but we are not specifically giving a number on what it will contribute in H2.
Unidentified Participant
Okay, more about then. How do you use indoor mask, whether it be personal employee personnel that you are using in Thailand for that facility for pho marketing, how will that be good news guidance in that sense?
Anand Kripalu
So we will have our own EPL team. We will take help and support from Indorama as needed. In areas needed, it could be by way of introductions to customers. It could be by way of support to get licenses done. And it could be, you know, in other areas, maybe even hiring of people. But finally, EPL is a different entity from Indorama and will run an independent operation in Thailand.
Unidentified Participant
Okay. Because what I’m gathering is Thailand will open doors in new geographies. If it is a question and that could be a price. I’m just trying to understand how you’re. Thinking in terms of the very small capital expenditure that you’re doing currently.
Anand Kripalu
See, Thailand itself is a very large few market, okay. Where we have very small share and that is linked to whatever we export currency from China into Thailand. So having an onshore production allows us to access the beauty and cosmetics market that typically has larger diarq and shorter lead times, which is tough to do through an export model. So our first objective is to truly exploit the Thailand market specifically in the area of beauty and cosmetics. But you are absolutely right. Once we set up base in Thailand, suddenly Malaysia is more accessible, Vietnam is more accessible, Indonesia is more accessible.
Okay? And that’s what I said when I said start small but accelerate fast. Okay? So that’s our thinking.
Unidentified Participant
Okay, thanks. Let me see. Thank you.
Anand Kripalu
Thank you.
operator
Thank you. A reminder to all the participants. You may press STAR and one to ask questions. Participants may press Star and one to ask questions. The next questions from the line of Anupam Jean from Indra’s, please go ahead.
Unidentified Participant
[inaudible]
Anand Kripalu
No, see, we’re not in a position to say that. Right. All we are saying is that we have been hunting down opportunities, you know, in geographies where we believe it can help us in transforming our business. We are looking at what’s available. I said that we have already signed a couple of NDAs to have more detailed conversation with a few times targeted parties. But in terms of timing or scale, you know, and whether it will happen or not happen, I don’t think I’m in a position to comment. We will absolutely share that with you when we are, when we have made a decision. But again, I want you to recognize that we are driving the agenda for M and A as hard as we can.
And ultimately it’s based on the opportunities available and the price at which you are willing to get it. Okay, so that is the whole point about M and A.
Unidentified Participant
And any amount that you have remarked for this.
Anand Kripalu
No, we’ve not earmarked an amount for this. But all I can say is that, you know, as I’ve already said, our debt to ebitda ratio is 0.45. So we have huge opportunity to leverage our balance sheet and we would be ready for even a medium sized or even a larger potential target because our balance sheet permits us to do so.
Unidentified Participant
Okay, thank you.
Anand Kripalu
Thank you.
operator
Thank you. The next question is from the line of meat from Motilal Oswal. Please go ahead.
Unidentified Participant
Hi sir. First of all, what is the amount we are spending on finance facilities? Hello.
Anand Kripalu
Yeah, hi. It’s about, you know, like I said, we’re starting small, right. And we’ll accelerate fast. So it’s roughly in the zone of about $5 million to start with in a leased facility. Right. But the plan is as business comes in, we will accelerate very fast.
Unidentified Participant
And what kind of margin profiles can we see in these operations? And that is high end geography.
Deepak Goyal
Margin will be equal to or slightly better than the global margin.
Unidentified Participant
Okay. And one more thing is that market, as you already mentioned that it’s a very big market and Indorama is also a very in that position. Right. So won’t it be a competitive challenge to like drama, like incubating another player in that location or how the entire arrangement.
Anand Kripalu
No, we are, there is no competition with Indorama. They are not operating in the categories that we are operating in, which is primarily to do with classic tubes. So there is absolutely no competition. If anything there are opportunities for synergy rather than competition.
Unidentified Participant
Okay. And apart from Thailand, any major Capex plans in any other geography are you planning and except for Brazil also as you mentioned, you are double the capacity in Brazil. Any other in us, India or Europe, you’re planning any Capex plans soon.
Deepak Goyal
So Capexes are part of the operating model means we have been maintaining that our Capex investments every year will be equal to roughly equal to our depreciation which is anywhere between 350 to 400 crores. Large part of this Capex expense goes into growth Capex. We produce more than 8 billion cubes a year and when we are growing volumes in high single digits etc. We are adding volumes which is larger than most players in this market. Right? And hence to deliver to this volume we continuously keep doing growth Capexes. We are mentioning the ones which are specifically into growth geographies like Brazil and Thailand.
However, other than that, the normal expansion Capexes are happening across geographies.
Unidentified Participant
Got it. Thank you.
Anand Kripalu
Thank you.
operator
Thank you. A reminder to all the participants. You may press star in one to ask question. Participants may press star and one to ask the question is there are no further questions from the Paris. I hand the conference over to Mr. Pratik Tolia for his closing comments. Over to you, sir.
Pratik Tholiya
Yeah, thank you. On behalf of Systematic Institution Equities, I’d like to thank all the participants for logging into this call. I would like to also thank the management once again for giving us the opportunity. I would like to request Anand sir if she has any closing comments to make.
Anand Kripalu
No, I just want to thank you Pratik and thank all the participants for your continued interest in epi. Thank you for joining us.
Pratik Tholiya
Thank you so much.
operator
Thank you. On behalf of systematic groups, that concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.