Yahoo Finance

This article first appeared on GuruFocus.

Release Date: May 14, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• EPL Ltd (BOM:500135) reported a strong quarter with revenue growth of 13.3% and EBITDA growth of 12%, maintaining an EBITDA margin of 20.1%.

• The Beauty and Cosmetics segment outperformed with a 26% year-on-year growth, highlighting the success of the company's strategic focus.

• Sustainability initiatives are gaining traction, with sustainable tube formats contributing 38% of sales, and the company receiving multiple awards for sustainability and innovation.

• The company has maintained a strong cash flow with a net debt to EBITDA ratio of 0.65, and ROCE improved by 184 basis points to 18.7%.

• EPL Ltd (BOM:500135) is expanding in high-growth emerging markets like Brazil and Thailand, which are expected to drive long-term growth.

Negative Points

• Profit after tax remained flat compared to last year due to a one-off benefit in the base period.

• Europe's growth was lower than expected at 8%, impacted by short-term operational issues and adverse customer mix.

• The oral care segment in India continues to face headwinds, affecting overall growth in that market.

• The company experienced a temporary increase in net debt due to dividend payouts and accelerated CapEx spending.

• Operational challenges in Europe, such as higher write-offs and outsourcing, have led to a contraction in margins.

Q & A Highlights

• Warning! GuruFocus has detected 2 Warning Sign with BOM:500135.

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Q: What drove the strong growth in the Amesa region, particularly in Beauty and Cosmetics (BNC), and how is the oral care segment performing in India? A: The growth in Amesa was driven by expanding the customer base and high-quality product offerings. The oral care segment in India is gradually recovering, and the company is confident in continuing and improving this growth trend. (Respondent: CEO)

Q: Despite the unit closure in China, sales increased. What was the reason for the closure, and can strong growth in the EAP region be sustained? A: The China factory closure was due to a customer-initiated move to a different location. The EAP region's growth is driven by strong performance in China and the commercialization of the Thailand plant. The company is confident in sustaining this momentum. (Respondent: CEO)

Q: Can you provide more details on the challenges and initiatives in Europe, given the volatile performance and margin contraction? A: Europe faced challenges due to adverse customer mix and operational issues. Initiatives are in place to address these, and the company expects to see improvements in margins in the coming quarters. (Respondent: CEO)