Essel: Looking for consolidation benefits - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Essel: Looking for consolidation benefits

May 16, 2001

Essel Propack Limited (formerly Essel Packaging) has reported a net profit growth of 16% to Rs 95 m in 4QFY01. The company's turnover during the period saw a 23% growth YoY. Essel finished FY01 with a 10% turnover growth and an 18% jump in net profit.

(Rs m)4QFY004QFY01ChangeFY00FY01Change
Net Sales 469 578 23.2% 2,070 2,281 10.2%
Other Income 18 57 215.0% 40 85 112.5%
Expenditure 287 416 44.9% 1,299 1,486 14.4%
Operating Profit (EBDIT) 182 162 -11.2% 771 794 3.0%
Operating Profit Margin (%)38.8%28.0% 37.2%34.8% 
Interest 93-64.4%256-74.8%
Profit before Tax11814623.5%50759417.2%
Exceptional expenses--  - 
Profit after Tax/(Loss)829515.5%36643318.4%
Net profit margin (%)17.5%16.4% 17.7%19.0% 
No. of Shares (eoy) (m)14.524.3 14.524.3 
Diluted no. of shares (m)24.324.3 24.324.3 
Earnings per share*13.515.6 15.017.8 
Current P/e ratio    9.7 

Essel makes lamitubes used in packaging consumer products like toothpaste, cosmetics and pharmaceuticals. It is the world's largest producer of collapsible lamitubes with a current capacity of more than 2 bn tubes post its merger with Propack in FY01. Essel's early entry into the lamitube market and the scale of its operations gives it tremendous cost advantages over any new entrant. It is also backwardly integrated into web-making for lamitubes.

The company has not merged the accounts of Propack with itself in FY01. Therefore, the real benefits of the consolidation will come into effect from FY02. At the analyst meet last year the management had stated that the combined turnover of Essel Propack will touch Rs 15 bn by FY05, thatís a CAGR growth of 60% in the next four years. Similarly, the net profit of the combined entity is estimated (by the Essel management) to touch Rs 3.3 bn by FY05. One cannot really comment on these targets unless one sees Essel Propack's merged numbers.

The company had allotted bonus shares in the ratio of 3:5 in January 2001.Consequently the paid up capital has increased to Rs 243 m. Essel's board of directors has recommended maintaining the dividend at 54% on the post bonus increased share capital.

At the current price of Rs 173 the stock trades at a P/E multiple of 9.7 times its FY01 earnings.

Equitymaster requests your view! Post a comment on "Essel: Looking for consolidation benefits ". Click here!


More Views on News

EPL 2020-21 Annual Report Analysis (Annual Result Update)

Aug 12, 2021 | Updated on Aug 12, 2021

Here's an analysis of the annual report of EPL for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of EPL. Also includes updates on the valuation of EPL.

EPL Announces Quarterly Results (1QFY22); Net Profit Up 32.7% (Quarterly Result Update)

Jul 31, 2021 | Updated on Jul 31, 2021

For the quarter ended June 2021, EPL has posted a net profit of Rs 605 m (up 32.7% YoY). Sales on the other hand came in at Rs 8 bn (up 7.8% YoY). Read on for a complete analysis of EPL's quarterly results.

EPL Announces Quarterly Results (3QFY21); Net Profit Up 17.3% (Quarterly Result Update)

Feb 3, 2021 | Updated on Feb 3, 2021

For the quarter ended December 2020, EPL has posted a net profit of Rs 725 m (up 17.3% YoY). Sales on the other hand came in at Rs 8 bn (up 7.9% YoY). Read on for a complete analysis of EPL's quarterly results.

What's Driving the Rally in UFlex Shares Today? (Views On News)

Jun 30, 2021

UFlex shares rallied over 20% to hit a 52-week high of Rs 572.9 today on strong earnings.

More Views on News

Most Popular

Sansera Engineering IPO: Key Points to Consider (Views On News)

Sep 8, 2021

This IPO is a pure OFS and the company is looking to raise Rs 12.8 bn at the upper price band of Rs 744.

5 Stocks that Turned Rs 1 Lakh into Rs 1 Crore (Views On News)

Sep 7, 2021

Patience is one of the biggest virtues you need to have if you want to become a crorepati in the stock market.

The Top Stocks to Sell in this Bull Market (Profit Hunter)

Sep 8, 2021

When I saw the list of so-called 'value stocks' published by a leading brokerage, my worst fears came true.

5 Indian Companies that are Leading the AI Race (Views On News)

Sep 9, 2021

During the pandemic, India reported the highest increase in the use of AI at 45% compared to other major economies. AI has potential to add US$90 bn to the Indian economy by 2025.

How to Create a Second Income from Trading (Profit Hunter)

Sep 10, 2021

My trading system that works in all kinds of markets.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2021
Get our special report Multibagger Stocks Guide (2021 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Sep 17, 2021 (Close)