EPL Limited (NSE: EPL) Q4 2025 Earnings Call dated May. 08, 2025
Corporate Participants:
Anand Kripalu — Managing Director and Global Chief Executive Officer
Unidentified Speaker
Deepak Goyal — Chief Financial Officer
Analysts:
Pratik Tholiya
Sanjesh Jain — Analyst
Sameer Gupta — Analyst
Akshat Bairathi — Analyst
Shalabh Agarwal — Analyst
Shubham Sehgal — Analyst
Nikhil Upadhyay — Analyst
Saket Kapoor — Analyst
Presentation:
Operator
Hey, ladies and gentlemen, good day, and welcome to the Q4 FY ’25 EPL Limited Earnings Conference Call hosted by Systematix Institutional Equities. 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 this conference call, please signal an operator by pressing star then 0 on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Pratik. Thank you, and over to you, sir.
Pratik Tholiya
Thank you. Yeah, hi. Thanks,. On behalf of Systematic Institution Equities, I would like to welcome all the participants who have locked into this conference call of EP Limited to discuss the 4th-quarter and year-ending FY ’25 earnings. At the outset, I’d like to thank the management for giving us the opportunity. On the management team, we have Mr Anand Kripali, MDN’s Global CEO; Mr MR Ramasani, COO; Mr Deepak Goyal, CFO; Mr Rao, President and Intelligence; and Mr Unkal, Head Legal, CSO and Compliance Officer. I would like to now invite Mr Anand Lipali to begin the proceedings by his — by giving his opening remarks. Thank you and over to you, sir.
Anand Kripalu — Managing Director and Global Chief Executive Officer
Thank you very much, Pratik, and hello, everyone. Very good evening to you and thank you for joining us for EPL’s Q4 FY ’25 earnings call. I’m delighted to share the fact that we had a strong quarter in the midst of a challenging macro-environment, reflecting the strength of our strategy and the rigor of our execution. Our revenue for the quarter grew by 7.4%, EBITDA grew by 17.7% and PAT grew by 42.4%. This marks the 11th consecutive quarter or of EBITDA margin expansion, supported by sustained double-digit EBITDA growth. Our margins remained robust at 20% plus, reflecting specific management actions to correct Europe and the Americas, while ensuring operating discipline and product mix improvements.
Revenue growth during the quarter was 7.4%, driven by a solid performance in the Americas and the EAP regions, while Europe recorded modest growth. In EMESA, particularly India, while overall growth remained flat, the underlying business performance is encouraging, negated partly by lower intercompany laminate sales, which helped optimize inventory levels and improve our overall net working capital. The underlying demand trend in tube remains positive. Within Personal Care and beyond, beauty and cosmetics witnessed over 20% growth, fueled by focused investments in capability and technology, adoption of, deeper customer engagement as well as sharper execution. This segmental segment continues to accelerate quarter-on-quarter, reinforcing our strategic direction and all the efforts that we have made on beauty and cosmetics over the last year.
EBITDA performance was encouraging across all regions. In India, margins have shown a clear recovery in-line with our commitment. We saw a 100 basis-points year-on-year improvement and a 170 basis-point sequential increase driven by operational efficiencies and improved product mix. Looking at the full-year, we delivered a well-rounded performance. Revenue grew by 7.6%, EBITDA rose by 17.5% with margin expansion of 169 basis-points . Underlying PAT grew by 44.6%. Our category mix continued to evolve in the right direction with Personal Care and beyond growing at 10.3%, nearly double the 5.6% growth in Oral Care. This segment now contributes to 48% of our total business. Stronger EBITDA and PAT combined with solid cash-flow generation has helped reduce our net-debt to EBITDA ratio to 0.54x with ROCE improving to 18%, expanding by 335 basis-points. Consequently, our EPS has improved from INR7.88 in FY ’24 to INR11.38 in FY ’25, an improvement in EPS of 44%. As a result of our consistent performance and focus on returning value to our shareholders, we are pleased to propose an increased final dividend of INR250 per share. Sustainability remains a cornerstone of our long-term vision. As of FY ’25, 33% of our overall portfolio is now recyclable and we are seeing strong customer engagement and conversion momentum in this area. During the quarter, APL was awarded an A-rating by CDP for both climate change and water security, which is actually their highest rating. Further, we were honored with the UNGC Forward Foster Sustainability Award 2025 under the category of Sustainable Supply Chain Excellence, reinforcing our leadership in responsible packaging along with multiple awards for our people practices. Looking ahead, I would like to highlight four key areas of focus. First, beauty and cosmetics growth. We are excited to build-on the momentum in our Beauty and cosmetics segment. Our order pipeline remains healthy with new customer wins across geographies, backed by tubes and superior printing capabilities. We are also making selective investments in extruded tubes to further strengthen our product offerings in this segment. This will remain one of our key focus areas as we continue to leverage our competitive advantage in sustainability and innovation and deliver strong double-digit growth. Two, expansion in high-growth markets. We see promising growth potential in Brazil, where capacity expansion is underway and expected to be operational in this quarter itself. Similarly, our Thailand greenfield project is progressing as planned and will contribute from H2 onwards. We will continue to explore further greenfield expansion and M&A as and when it’s available. These initiatives demonstrate our ability to scale operations as we look-ahead. Number three, sustainability. Our sustainable tube mix has risen to 33%, up from 21% last year. This shift is helping us gain wallet share with large global brands focused on ESG. We expect this trend to continue strengthening our competitive position in the medium-term. And number four, margin expansion. We are in a strong position, having demonstrated consistent improvement over the past several quarters. Europe and the Americas region continue to show solid momentum through restructuring and cost optimization. Overall, we remain confident of delivering EBITDA growth ahead of revenue growth and our sharp focus on capex and interest costs positions us well for continued PAT growth and ROCE improvement. Further, we expect and importantly, we expect minimal impact of US tariffs as we have local manufacturing in the US. Also, our exports to the US is relatively small. Further, ETL has contracted contractual pass-through of duties with most customers. So in summary, FY ’25 has been a year of strong execution, solid financial delivery and strategic progress. Our ability to navigate global challenges while advancing our goals in sustainability, margin enhancement and innovation puts us in a strong position for FY ’26. We remain confident in our ability to deliver double-digit growth and continue improving margins. With that, we will now open the floor up for questions.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sanjesh Jain from ICICI Securities. Please go-ahead.
Sanjesh Jain
Yeah, good evening, sir. Thanks for this opportunity. I got few questions. First on the Brazil and Thailand greenfield expansion, what we are doing, what is the total capacity addition this expansion will lead to as a company?
Anand Kripalu
So in Brazil, we are adding capacity essentially for beauty and cosmetics because we have already sold-out our existing capacity on beauty and cosmetics, okay? So we are adding that. Now specifically, in terms of volume contribution is going to be about 40 million tubes a year, right, which is the expansion of Brazil, right? Thailand, we are making an entry as we said, and the objective in Thailand actually is to start small, but scale-up fast, okay. So we will start small, establish our factory on-the-ground. It will affect or impact positively our H2 numbers. But once we are on-the-ground, we will get — as we get more-and-more customer orders, which actually we have a reasonably rich pipeline, we will expand rapidly. So that’s how we are thinking about it, Sanjesh.
Sanjesh Jain
Very clear, sir. Second question on India, you did mention that India underlying growth was encouraging while we were hurt because of laminate sale. What was the underlying growth ex of laminates?.
Anand Kripalu
So Sanjesh, we are not actually splitting this. I called it out to explain the fact is we have trimmed our inventory materially, right, and that has helped our overall working capital numbers. All I can tell you is that the cube revenue growth, which is the core of our business, right, the rest is kind of trading and WIP work-in progress right is decent.
Sanjesh Jain
Mid-single digit will be a decent number for you.
Anand Kripalu
Sorry
Sanjesh Jain
Will it be mid-single digitim?
Anand Kripalu
Sorry, your voice is breaking, Sanjesh, can you say that again?
Sanjesh Jain
So is the tube revenue growth in mid-single digit for us in India?
Anand Kripalu
Yeah, it’s mid to-high single-digit.
Sanjesh Jain
Oh, mid to-high single-digit.
Anand Kripalu
Okay. Yeah,
Sanjesh Jain
Okay. Okay. And the next follow-up question is on the EAP. There is a sharp drop-in the EBIT margin sequentially in EAP. Any particular reason there?
Anand Kripalu
Yeah. So sequentially, I would urge you not to look at the numbers. Q4 in EAP is the Chinese New Year quarter, okay, and typically has the softest margins in the year.
Sanjesh Jain
Okay.
Anand Kripalu
So — and our business is best looked at seasonally, which is quarter-on-year-on-year rather than quarter-on-quarter.
Unidentified Speaker
Sanjesh, EC EBIT margin would make a lot of sense on a full-year basis. There was quarter-quarter — quarter-on-quarter fluctuation because of the high-technology tax benefit that we get. However, on a full-year basis, it is equalized. So full-year to full-year EBIT margin will make a lot more sense.
Sanjesh Jain
Very clear, very clear. Then the next question is on double-digit growth guidance. This year, the EBITDA growth, thanks to the cost optimization margin improvement. I Think we have — we wanted to reach in terms of EBITDA margin. Now probably most of the growth will come from the revenue growth. Where we are now at 4%, how should we see double-digit growth guidance for next year in that scenario
Operator
Ladies and gentlemen, we seem to have lost the connection with the management. Please wait while we reconnect the management ladies and gentlemen, we have the management back online with us. Sir, please go-ahead.
Sanjesh Jain
Sir, you want me to repeat the question?
Anand Kripalu
Yes, the last one I hear got that.
Sanjesh Jain
Okay. See, my question was on the double-digit EBITDA growth guidance for next year. In terms of EBITDA margin, we have reached where we have targeted for almost 20.5%. So next year, most of the EBITDA growth should come by the revenue growth, where we are at mid-single digit today for the whole year FY ’24 as well. What gives us the confidence of a double-digit growth in FY ’26?
Anand Kripalu
Thank you. So first of all, we still have a have margin improvement opportunities in select geographies, okay? I don’t think the full margin improvement has played out in the Americas or indeed even in Europe and there are some corrections to be done in India. So there is still opportunity for margin improvement. But I think your point about double-digit revenue growth, I think is an important one. Now the way we’re thinking about it, and listen, we cannot deal with macros, right? And what happens with macros, given that there is some softness in FMCG in India and so on and so forth. But what I can tell you is this. So one is, first of all, that our beauty and cosmetics growth, where there is massive headroom for expansion, we have been working on this over the last year, probably 15 months, and we are now beginning to see this momentum coming. And the day we get to mid to-high teens consistency in beauty and cosmetics growth, our blended growth will come into the double-digit zone.
The second point I want to make is that, you know, while there are certain challenges with macros, particularly, let’s say, in India and China to an extent, there are various things we’re doing to mitigate this. Just as an example, in China, for instance, we are looking at driving extruded business, right, and we have made a selective investment in extruded capability, right? So while we drive conversion to, we head-on start taking share in extruded. And actually we are seeing very, very good signs of success by going head-on with extruded tubes. In India, for instance, we are mounting a lot more aggression on exports out of India, okay, and we have the Middle-East and the Africa region as part of EMESA, right, and those are opportunities for growth.
So when you look at all this put together, right, I think we have a clear line-of-sight for double-digit growth. If the macros were a little more enabling, that would have happened earlier, but we are doing things to make sure that even if we don’t see a major reversal of that, that we get there in quick time.
Sanjesh Jain
What is the cap-rate for next increase per annum for last three years?
Anand Kripalu
Okay is it?
Sanjesh Jain
Is it audible now?
Anand Kripalu
Yeah.
Sanjesh Jain
So I was looking for a capex for FY ’26. For last three year, it has been in the range of INR360 crore to INR380 crore. That should be the number for FY ’26 as well.
Deepak Goyal
Right, Sanjesh. That’s how we are looking at the capex plan right now. The capex is sufficient as I’ve been mentioning, it’s sufficient to fund our double-digit growth ambition.
Sanjesh Jain
Very clear. Just one on the US tariff side. We do export laminates from India and China and that
Operator
Sorry, sorry,
Anand Kripalu
Your voice is breaking.
Sanjesh Jain
Is it clear now?
Anand Kripalu
Hello.
Operator
So if you’re using a headset, I would request you to use a handset. Your voice was breaking.
Sanjesh Jain
No, can you hear me? I’m a speaker, not hello.
Anand Kripalu
Okay. Yeah, please try again.
Sanjesh Jain
Okay. So I was looking at US export and the tariff impact for the laminates which we from India and China to US. Can it bring down our competitiveness in the US market
Anand Kripalu
No, it will bring down our competitiveness. I mean, we are producing on-the-ground, right? Our customers, we have a contractual pass-through, right? And I think we have a cost optimal total delivered cost anyway. So as far as we are concerned, I think it will just remain a kind of stable competitive environment.
Deepak Goyal
Yeah. If I could add, Anu. Sanjesh, also the laminate capacity in the US is hardly there. And most of the supply locations also have the similar tariff impact. And hence, when we are looking at our laminate landed cost versus competition or versus other geographies, it would still remain competitive. And hence, we believe that if the — and this tariff increase of 10% and if further tariff increase happens, then it would most likely get passed on to the consumer because in such a short span of time, it would be very difficult for any industry to really bring in new capacities.
Sanjesh Jain
Very clear.
Anand Kripalu
Just add one more point. Actually, I think there is a source of competitive advantage for us. A lot of cubes in the US come from China. We have local production in the US and we have capacity in the US. We actually and there are many customers of ours, including distributors and so on who have been reaching out to us, right? Actually, there could be a source of competitive advantage, right, as this thing plays out,
Sanjesh Jain
Sir. So do you have a number? How much of tubes get exported of China?
Operator
So
Sanjesh Jain
This is just a follow-up. I will come back-in the queue. Any idea how much of the tubes in US get exported from China,
Anand Kripalu
Do you have an idea? Listen, it’s a very significant part of what sells on the West Coast of the US, right? And it is a material percentage of total US sales, which means definitely in double-digit percentage contribution to US sales. Specific percentage numbers we won’t have.
Sanjesh Jain
Very clear, sir. Thank you. Thank you for patiently answering all those questions and best of luck for the coming quarters.
Anand Kripalu
Thank you. Thank you.
Operator
Thank you. The next 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. Sir, firstly, I heard your piece on intercompany laminates, which have affected Amesa growth. But my understanding would be that these are lower-margin categories and it should have had an impact on a margin improvement. Now with that not happening, would it assume that going-forward as this center company laminate issue goes away, we would actually see a margin tapering off from here from here on.
Anand Kripalu
See, first of all, I will just use this as an explanation because what happens is on a full-year basis, there is not much difference between, generally speaking, the tube revenue growth, the laminate growth and the total growth. But quarter-to-quarter sometimes, there are inventory variations that happen that impact the results that prevents you from reading what’s really happening properly, okay? I think what you have to believe is that we have a range for delivering India margins, right, and we are committed to getting to that range in a stable business environment, right? And we have plans in-place to make sure we get there, right? But our annual plans and so on has a blended margin and the historic data also has a blended margin. So I only use this for this quarter because the difference is material as we have brought down inventory. So I don’t think you need to read more than more into it than just this quarter’s explanation, but it’s nothing to do with the fundamental structure of the business on a full-year basis.
Sameer Gupta
Got it, sir. Just a follow-up there. So ex of the laminate tubes, the margins of tubes are Intact. They are not down Y-o-Y. Would that be a correct understanding?
Unidentified Speaker
That is right, Sameer. Also, on a full-year basis, India margin and margin have been soft and we said last quarter as well that we have taken specific actions to improve our margins. Those actions are well underway and we will — we should see improvement as we go along.
Sameer Gupta
Got it. Got it. Got it. That is very clear. Sir, on the tariff impact, again, I understand that Sanjesh also asked you very detailed questions just one bit here. So what I understand is that instead of exporting laminates from China, we are going to export it from India because the tariff differential is higher versus in China versus India. Does that increase cost for us?
Anand Kripalu
No, so that is not what I meant actually then I didn’t communicate clearly. So what happens is we are moving laminate to the US already only from India, okay, because China already had a duty — landed duty when it went to the US and China. So we had moved all our laminate sourcing to India anyway, okay. What I really meant was that there are lot of tubes right made tubes that are exported from China into the US Now with tariffs on China going up, our US business that sources laminate from India and makes tubes in the US will have a source of competitive advantage on pricing compared to tubes that are coming in from China. Lots of tubes come in from China directly to the West west coast of the US right and a little less so on the East coast of the US. With our local production, we will be in a position of competitive advantage.
Sameer Gupta
I understand this, sir. That’s very, very clear. Thanks again. One last question, if I may squeeze in. Deepak mentioned about the capex will be in the ballpark of INR350 crore to INR380 crore again, but shouldn’t we build-in a little higher because in Thailand, you’re putting a greenfield or it’s already there in FY ’25 part of it.
Deepak Goyal
So some bit of expenses there, but large part of it will come in FY ’26. And in, we have been saying that the greenfield expenses would come in higher. However, Thailand is a smaller facility and also we are optimizing our capex spreads through various initiatives. Next year, our plan is to spend around INR380 INR90 crore and that should be sufficient to cover for our — both the good plans as well as Thailand greenfield.
Sameer Gupta
Very clear. Very clear. Thank you, Deepak. Thanks, Anand. I’ll come back-in the queue for follow-ups.
Anand Kripalu
Thank you. Okay. Thank you.
Operator
Thank you. The next question is from the line of from RSP and Ventures. Please go-ahead.
Akshat Bairathi
Hi, thank you for the opportunity. Sir, given that there was some headwinds in Q3 and Q4, both in China and you mentioned that there was Chinese New Year in Q4 as well. So inside of that, we have shown 9% growth year-on-year in the EAP region. So can we expect a double-digit kind of a growth in China for FY ’26 given these numbers? And the second question will be a bookkeeping question on the tax-rate. So for the full-year, our tax-rate has been very low. So why is that? And what will be the expected tax-rate for FY business?
Anand Kripalu
So we don’t give regional growth guidance, just so that we are clear about it, right. But we do expect ESP right to continue to grow strongly. And it will also get beefed up in H2 as Thailand comes on-stream. And Thailand is going to be part of EAP, right? And EAP has to continue to perform well for us to achieve our total global ambition of double-digit growth, okay. So we’re doing everything necessary for that to happen. I’ll just request Deepak on the tax question.
Deepak Goyal
Yeah. So the tax-rate this year is lower because with the turnaround in Europe. Our Poland plant has low tax-rate. The mix of that profit has kind of gone up. Also, the high-technology benefit that we get-in China. This year, there was marginal impact of last year that also kind of came in this financial year. On a steady-state basis, I believe that with the country’s mix coming in, anywhere between 18% to 22% is our rightful interest-rate or sorry tax-rate that we should be — that should be delivering.
Akshat Bairathi
Thank you. Okay. Okay, sir. Thank you so much. That’s it from my side. All the best.
Anand Kripalu
Thank you. Thank you very much.
Operator
Thank you. Thank you. The next question is from the line of Salab Agarwal from Snowball Capital Investments Advisors LLP. Please go-ahead.
Shalabh Agarwal
Good evening, sir, and thank you for this opportunity and many congratulations for the continued good results. So the first question is referring to your presentation, presentation, slide number 14 where we have given the categories of the personal care and beyond. So are there any subcategories on the left-side where we are still not present and where our competitors are present and where we may have a scope of launching — launching products in that subcategory.
Anand Kripalu
I mean, you know, so there are lots of micro categories that can sell-in tubes. For instance, cockroach repellants, right?
Shalabh Agarwal
Yeah,
Anand Kripalu
Mainly. And you can call that personal care or whatever you like, but mandi and we are filling — we are providing tubes for the mandi industry. But by and large, I would say that you know the left-hand side covers most of the subcategories, because the last one we added there was grease and grease and oil. Okay, so there are these small ones really keep emerging but they won’t be so material really the material ones are the ones that start from the that?
Shalabh Agarwal
Sure. And are there any material categories in this beauty and care where our exposure is still limited or we are still smaller than our competitors where we can have a much higher scope of growth in future.
Anand Kripalu
So I think we tend to be reasonably good on hair-care,
Shalabh Agarwal
Okay.
Anand Kripalu
But I think we have a lot of headroom on skin care, right, at a very broad level.
Shalabh Agarwal
Sure, sure. And this will primarily be the European market where we will be behind some of the niche competitors.
Anand Kripalu
I mean, I think you see, we have relatively lower shares in beauty and cosmetics, certainly in most geographies, okay? Specifically, we have very low shares in Europe and the Americas, right? And we have a very aggressive plans to grow in the Europe and the Americas and we are beginning to see traction in both these regions, okay. In China, we still have a relatively small share, but we’ve been growing at 20% for five years now in a row, okay. So the opportunities are growing much faster than the category. So I think the main point is the headroom for growth in beauty and cosmetics is it’s significant everywhere in the world, probably a little bigger in some regions and a little less than other regions.
Shalabh Agarwal
Right. And sir, what will be our right to win in some of these markets, especially in these categories where we are still little smaller. Is it if we really benchmark ourselves with competitors on cost, so can we confidently say that we will be given our size and economies of scale, are we the lowest-cost manufacturer even for some of these duty and care teams, would that be a good statement to make at least on 80%, 90% of product
Anand Kripalu
So as a principle, I can tell you, we are the lowest-cost producer in the world, right, by at least 3%, if not more, okay? And that is because compared to any other regional competitor, the Indian mindset of frugality as a culture, right, and our ability to extract more from the machines and run our machines for longer than anybody else in the world. So generally speaking, total delivered cost like-for-like in APL is lower, okay? And that’s why you also see that we have better margins than most other people. Our other right to win apart from cost leadership, right, right, is the fact that we are a leader in laminated tube. And as people convert to laminated tubes, we get a higher share, right, as they converted from extruded. We also have, which is a very, very cost-effective option to ensure that you have all the bells and whistles of a beauty and cosmetics tube, but at a much lower-price than extruded Extruded. Extruded and selectively leveraging the deep customer relationships we have, we are also pursuing extruded, okay, and with reasonable success. And we have a reasonable extruded business in Europe, in India and now in China.
Shalabh Agarwal
Sure, sure, sure. And sir, just lastly, if I may add, if we calculate the contribution of pharma sector in our in our sales, it seems this year the growth has been in mid-single digits. Any specific reason why it has — not because last two years it has been in double-digits, given the size of the category, one would have thought that the growth would have been higher. So any particular reason why the growth has come down?
Unidentified Speaker
I don’t think growth has come down, but we do pharma largely in certain markets like India, China, we do more, whereas Europe and things like that, we are not — we are doing very little of pharma. So maybe that segment in some of the places could have slightly a lower sized entry that we continue to grow. If you look at internally that when we track that we continue to grow in terms of volume. But maybe the value that is generated because of the size of the tube would have been slightly lower that we need to — we will check and revert subsequently when you speak to, right?
Anand Kripalu
But what has been the priority
Unidentified Speaker
For us.
Anand Kripalu
Priority for us and we continue to drive it.
Unidentified Speaker
We do really well in India. A lot of conversions are taking place and we lead the conversions as the market-leader in India.
Shalabh Agarwal
Sure., thank you for answering my questions and all the very best.
Anand Kripalu
Thank you. Thank you.
Operator
Thank you. The next question is from the line of Shubham Segal from Simple. Please go-ahead.
Shubham Sehgal
Hello, am I audible?
Anand Kripalu
Yeah.
Shubham Sehgal
Yeah, I have two questions. So I just wanted to ask, I mean, as you mentioned earlier that like geography-wise, the growth might matter due to volatile conditions and like also the special geographies. But while modeling or while like targeting the double-digit growth, do we still keep a growth rate in mind for our different geographies or like how do we look at
Anand Kripalu
Our internally, we absolutely have an ambition for every geography, but at a global level, it’s really the category that we are focusing on, right? And we know that the headroom for growth is the biggest in beauty and cosmetics. You’re beginning to see that momentum, right? And when the macros improve, you know, you will have the rest of the portfolio also coming back, right, particularly like oral care. So as we establish this kind of mid-teens or high-teens growth for beauty and cosmetics globally and with some recovery in oral, when you put the two together, right, it will quite simply get to double-digit growth.
Okay. So therefore, that’s really the thing because in oral, we continue to grow our customer-base and grow wallet share, but because we’re already so large, that’s a little more modest. The big headroom is from beauty and cosmetics and you can see the momentum picking-up for beauty and cosmetics. So actually, I’m very confident that with a little bit more support from the macros, right, I mean, we will be in the double-digits okay,
Shubham Sehgal
Got it. So yeah, like so apart from the macros, do we think there are any other challenges that we could face that like we could not be able to achieve a double-digit growth.
Anand Kripalu
No, because you see, apart from all this, we are also expanding Brazil. We are experience getting into Thailand, okay. And of course, we are very open to M&A and we are looking as much as we can for opportunities in M&A. So if you put all this together, right, I think we have a plan to get there, right? And at the forefront of that plan is the acceleration of beauty and cosmetics where we have put in huge investments as well in terms of resource and capability. So I actually think that it is around the corner.
Shubham Sehgal
Okay, great. Thank you. That’s from my side.
Anand Kripalu
Thank you.
Operator
Thank you. Thank you. Participants who wish to ask a question may press star and one at this time. The next question is from the line of Nikhil from. Please go-ahead.
Nikhil Upadhyay
Yeah, hi, good evening. Thanks for the opportunity and many congrats on the results. I think we’ve delivered what we’ve been guiding. Good to see that. I have two questions. One is on the growth part which Subham was just discussing. And Anand, how — when we think about growth, there are two-ways. One is new product launches are getting share from existing products. So when you say that we are getting confidence on growth, is it like we are getting shares in existing products or are new products which are about to be launched and we are the sole suppliers, that’s where we believe the growth will happen. Just some sense, if you can give
Anand Kripalu
So listen, all-of-the-above, honestly, we are expanding our customer-base very aggressively on beauty and cosmetics, right? And in India, we are really going aggressively after all the D2C brands, for instance, okay? So we are expanding our customer-base. The second is, many of those smaller customers require innovation, right, and the innovation could be in the tube delivery, in the nozzle or in the nature of the printing, but they also require very different service dimensions, right, your ability to be more agile and turnaround times and service levels that are very different from the oral care customers, okay? And of course, with our existing customers, right, many of our existing large customers, for instance, we have seen them wanting to convert from bottles to tubes in hair-care, right? And that meant that earlier we were not in the market for haircare products like conditioners and now we have a large business that’s coming in from hair-care itself.
So really all of these — all I want to tell you is this on beauty and cosmetics, the mantra in the company is, we will do what it takes to accelerate beauty and cosmetics. No size of order is too small for EPL to go and service that order, okay. So there is a huge movement in the company and we tell you a huge management focus to transform us from being an oral company that does beauty and cosmetics to being a beauty and cosmetics company. So okay. So that’s how we are thinking about it. And therefore, whatever needs to be done, we are doing.
Nikhil Upadhyay
Okay. Second question was and this is the last question and this is interrelated. If you look at our cash-flow generation, it’s been very strong, almost average of INR600 crore to INR800 crores over last two, three years. And our capex has remained in that range of INR350 crores INR400 crores depending upon greenfield or brownfield. So one point, will our payout ratios remain high because there has been a change at the promoter level. So how is the new promoter or the new entity which has come in, how are they thinking about? And secondly, over the next two, three years from this 18% ROCE, where do you think this business to stabilize? Because margins will not be like a constant trajectory of improvement because then customer will also come back. So where do you think the ROCs will stabilize in next two, three years?
Anand Kripalu
Yeah,.
Deepak Goyal
Yeah. So, Nikhil, first on the dividend and capex, yes, we are a strong cash-generating company and the cash-flow year-over-year has been improving. In FY ’25 itself, if you see, we have been able to delever the company by more than INR100 crores through the organic cash flows after paying for all the capexes and the dividend. The dividend, we are also a very strong dividend-paying company and our dividend payout ratios or dividend payout has been improving year-over-year. In FY ’25, if the final dividend gets approved by in the AGM, we will pay INR5 per share dividend versus a INR45 that we paid last year. So our dividend has also been improving. We believe that we will continue the policy of this strong dividend payout and marginal improvement year-over-year even when we deliver the company a bit, but also look for M&As more aggressively. Your second question was on the
Nikhil Upadhyay
ROCE, where will they stabilize in next two, three years?
Deepak Goyal
See, this business has a potential of improving ROCE significantly. Our policy Of our capex investments equal to depreciation has been working well. It means that our net asset-base doesn’t grow and this investment helps us deliver double-digit revenue growth and consequent EBITDA and PAT improvement, which means that ROCE expansion as a model remains. We believe that in the short-term, we should definitely cross 20, but long-term, this ROC can expand even faster. So ROC expansion is something that we are clearly focused on.
Nikhil Upadhyay
Okay. Okay. But where do you think there could be a challenge in terms of improving the margins because at the end your customers are FMCGs and all, which — which will push-back on if the margins increase too much. So or is there — is this the right way to think or hello?
Operator
Ladies and gentlemen, we seem to have lost the management line. Please hold while we reconnect the management
Ladies and gentlemen, we have the management back on-time with us. So you may proceed.
Anand Kripalu
Deepak, you all to complete the answer that you were talking about ROC.
Deepak Goyal
ROC answer I completed. Nikhil, I think you had a follow-up question.
Nikhil Upadhyay
Yeah, I had the last question. See, we are at 21% EBITDA margin. And if you look at history in last 15 years, this business has done beyond 20 very rarely. And the kind of customer profile we have, which is like FMCG and like which would push-back if the margins increased too much or like if we do make very-high margins. So where do you think the margins? We may get a pushback from the customers and that can be the cap on the margins up. So is there a different way of thinking now versus what has happened in the business in last 15 years?
Deepak Goyal
See there is a difference in the margin profile this time versus what happened in the past. This time when we have delivered 20.3% margin in this quarter, we have not done it by huffing and puffing and stretching our P&L. All four regions, if you see and Amesa and EAP margins are actually lower than prior year, right? And Europe is still at 16% 17%, Americas at, 18%, 19%, which we believe is in the right range probably with some opportunity is still left. So we have reached this margin without stretching our P&L. So we believe it is in sustainable zone with some opportunities still left. However, to continuously delivering an EBITDA growth is essential to deliver a strong revenue growth also and that is where all of us are focused on. So I think as a management team, when we are thinking of it, we are looking at delivering double-digit revenue growth and margin growth ahead of revenue. Okay, right.
Nikhil Upadhyay
Okay. Sure. Yeah. Thanks a lot. Thanks. That’s answers my question. Thanks a lot.
Operator
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. To ask a question, please press star and one now. The next question is from the line of Shubham Segal from Simple. Please go-ahead.
Shubham Sehgal
Yeah, I just had a follow-up on the margin itself. So it previously we had mentioned that we are beginning to target smaller customers as well to get a good margin on our orders. So like that strategy, could you just like elaborate how it is faring for us as of now? And will it have any impactful — like will it have any materially impact on our margins, like will it support our margins or will it take a longer time? So could you just elaborate on that?
Deepak Goyal
Yeah. So smaller customers are mostly in Buty and cosmetics, right? And as we are getting into butyne Cosmetics, we believe that our margin will automatically get a little bit of leverage because the ASP for butmetics is higher, the fixed-cost kind of remain — continue to remain as they are and hence there is a better leverage. That enables us to deliver a little bit of leverage on EBITDA. However, you see we have a large base, right? And for any specific segment to make a material impact on overall level, it will be — it will take some time. But is it a positive as a trend-line? I think it will continue to remain positive and that is the reason we as management say that we are looking at delivering double-digit revenue growth and margin growth ahead of revenues.
Shubham Sehgal
Okay. So — but also to service the smaller customers, like how — did we like make any changes in our like supply-chain or something or because I remember in like, I think three or four con-calls ago, we had started to mention that we are targeting the smaller customers. So did we have to make any changes at the company-level or we just thought that it would be now better as we can target these?
Deepak Goyal
So there are multiple changes that we have made, right? And this we have been communicating to our investors now for some time. The first is in the acquisition strategy itself. When we look at Oral Care as a category, you are generally talking about four large players of Colgate, PNG, Unilever, et-cetera, right? While beauty and cosmetics as a category is smaller customers — regional customers across geography. So the acquisition strategy has to be different and we have hired more salespeople to — which are — which we are calling hunters to really acquire those customers. Second is the back-end flexibility. We need flexibility for larger type of fuels, more, smaller — smaller MOQs and more flexibility in our plants, right? So those are the — and it requires some capex investment that we have mostly done in all of our plants, all of our regions. So those are the investments that we are making to deliver to this growth. So it’s not only focus and effort only, it is on the back of solid investment in the ground and initiatives that will take us to accelerated VLC growth?
Shubham Sehgal
Okay. Thank you.
Anand Kripalu
Thank you.
Operator
Thank you. Thank you. The next question is from the line of Saket Kapoor from Kapoor &co. Please go-ahead.
Saket Kapoor
Yeah sir, and thank you for the opportunity. Sir, can you give some color on how the raw-material basket is currently shaping up and the key constituent the entire value chain
Anand Kripalu
I mean, I would say that raw materials basically have been, I would say, benign, if I can use that word. And prices of all the key commodities have been kind of range about, okay. So I think it’s a stable cost environment, commodity cost environment that we’re in right now.
Saket Kapoor
And sir, can you give the key consequence in terms of percentage which constitutes the major raw-material basket or are they crude derivatives?
Anand Kripalu
Are they the crude derivatives on this?
Unidentified Speaker
Are they crude derivatives, so yeah,. So some of them are crude, some of them are the Natal. It’s primarily polymers, yeah. But this over a period of time, it’s a range-bound after the COVID escalation and the supply-chain disruptions. Now it has become more or less stable. There is some amount of variation which we pass-through. So because most of our businesses are contractual businesses, we pass-through.
Saket Kapoor
So for RM continuity, we have long-term contract with clause or who are the key suppliers also from whom we source our raw materials domestically and internationally?
Unidentified Speaker
Primarily that we have long-term contract with most of the polymer manufacturers. You know global manufacturers are down, DuPont and exon that we have long-term relationship with us. But it’s every time that we will negotiate and do. We don’t have a price contract, but we have a volume contracts.
Saket Kapoor
And domestically, sir, we are sourcing from.
Unidentified Speaker
Yeah, we buy from, we buy from other chemicals. We buy from wherever suitable we buy.
Saket Kapoor
Okay. Thank you, sir and all the best.
Anand Kripalu
Thank you.
Operator
Thank you. The next question is from the line of Salab Agarwal from Snowball Capital. Please go-ahead.
Shalabh Agarwal
Thank you, sir for giving the opportunity again. Sir, we — I just wanted to get a little more insight into our business with some of the bigger Oral care customers in terms of — do we get a similar value contribution of value share like in other businesses in terms of manufacturing laminates and tubes in our factory and selling them and delivering it to their factory. Is that how the model works or is it different?
Unidentified Speaker
No, you’re right. That’s how the model works. We are one of the companies which is fully-integrated from film to tube. We also make in some places cap. So it’s a fully-integrated plan. Most of the world care vendors have — you know they have their own buying strategies. In some places, maybe for the same customer, maybe we may be the primary supplier. In some regions, we may be secondary supplier. But that balance depends upon our service levels, our ability to meet our other targets, right? So it’s very stable business, contractual businesses. In many places, it’s a contractual businesses. So what you need to also importantly note over a period of last 10 years, we are also moving to supply to many regional rural care players. See like in India, many regional rural care players. In China, there are many regional world care players.
There are country-specific are region-specific. So we also have over a period of time, have a good business relationship with. So overall that overall as a category grows by certain percentage, we will always grow slightly better than that because that we continue to add customers.
Shalabh Agarwal
Yeah, sure. But the entire few everything is getting manufactured in our factory and being supplied to them.
Unidentified Speaker
Yes, we make as you know, we make laminates in few places because laminate is bulkly manufactured, easily transportable, but we are in many.
Shalabh Agarwal
Sure. Thank you, sir. Thank you.
Anand Kripalu
Thank you.
Unidentified Speaker
Thank you.
Operator
Thank you. As there are no further questions from the participants, I now hand the conference over to Mr Pratik for closing comments.
Pratik Tholiya
Thank you. Yeah. Thanks, Amshar. Once again, on behalf of Equities, I’d like to thank all the participants for joining for this conference call. And once again, thanks to the management for giving us the opportunity. So would you like to make any closing comments?
Anand Kripalu
No, that’s it. I just want to thank everybody for their continued support to EPF.
Pratik Tholiya
Great. Thank you so much.
Anand Kripalu
Thank you. Okay. Thank you. Bye.
Pratik Tholiya
Now, thank you.
Operator
Thank you. On behalf of Systematix Institutional Equities, that concludes this conference. Thank you for joining us and you may now disconnect your lines