India: Essel Propack, Gujarat Fluorochemicals, PSP Projects and more

• We believe EPL with its new management under Blackstone is destined for long-term growth, driven by: a) growing revenue contribution from Personal Care products, b) a gradual shift to laminated tubes from plastic/aluminum tubes, c) a recovery in travel tube, with the lifting of travel restrictions across the globe, d) higher revenue sustainability owing to long-term contracts in the Oral Care segment, and e) customer additions across geographies as well as greater cross-selling opportunities.
• However, EPL has been witnessing margin pressures since the last five quarters, which is likely to continue in the next couple of quarters too due to volatility in raw material prices.
• We believe EPL deserves to trade at higher multiples than its peers owing to its better global presence, strong management and leadership position in the Oral Care segment.

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• Gujarat Fluorochemicals Ltd (GFCL) will likely benefit from rising demand / realisation for fluoropolymers.
• Company is backward-integrated for most products, which enables it to expand capacity faster than global peers.
• PTFE price increase is being reflected in export realisatons; PVDF and FKM product developments are moving in the right direction.

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• PSP Projects (PSPPL) – incorporated in 2008 and led by Mr. P.S. Patel (CMD & CEO), has been working in the Buildings & Factories construction business
• PSPPL has gradually expanded its construction reach starting from Gujarat to other geographies over the years.
• We recommend a Buy the stock for a target price of Rs 620/ implying an upside of 11% from CMP

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.