EPL Limited Q1 FY27: Revenue Soars 25.3% to ₹XXXX Crore, EBITDA Grows 15.2%

EPL Limited reported a strong Q1 FY27 with revenue growth of 25.3% and EBITDA growth of 15.2%. The company achieved a record EBITDA margin of 18.8%, with underlying revenue growth of 20% and underlying EBITDA margins of 19.6%.

This marks the fifth consecutive quarter of double-digit revenue growth and the fifteenth consecutive quarter of double-digit EBITDA growth. Growth was broad-based across categories, with Beauty & Cosmetics and Oral Care both exceeding 20% growth. Personal Care & Beyond now constitutes 54% of the portfolio. Regionally, EAP led with 34.3% growth, followed by Americas (29.4%), Europe (20.2%), and AMESA (17%).

The company successfully passed on cost increases through judicious pricing and maintained cost discipline, enabling growth investments. PAT delivery was in line with expectations, with a PBT increase of 10%, though PAT declined 1.4% due to a low base year ETR. Return on capital employed stood at 18.5%.

Innovation and sustainability remain key, with sustainable tubes accounting for 44% of the product mix. The company received innovation awards and recognition for operational excellence and being a Great Place to Work.

Regarding the proposed merger with Indovida, approval from the Competition Commission of India has been received, and the transaction is progressing as per the planned timeline.

Looking ahead, EPL is focused on strengthening its leadership in Beauty & Cosmetics, accelerating presence in high-growth markets like Thailand, maintaining financial discipline for margin expansion, and expanding into newer packaging formats beyond tubes. The company has raised its growth guidance to high teens for the next few quarters while maintaining underlying EBITDA margins around 20%.

During the earnings call, management addressed queries regarding an increase in working capital driven by inventories and ahead-of-the-curve CapEx investments. They clarified that receivables are within normal ranges. Concerns about Europe's margin contraction were addressed by explaining investments in capacity expansion and new production capabilities for long-term growth, with expected margin recovery as operational efficiencies improve. The company confirmed manufacturing footprints in Poland and Germany.

Guidance was clarified to be for top-line revenue growth to high teens, with a sustained underlying EBITDA margin of 20%. The PBT growth is expected to be strong for the full year, despite earlier PAT figures being affected by tax rate and phasing issues. The company is actively scouting for acquisition opportunities to expand into new formats and markets.

Management reiterated that the Q1 FY27 performance was strong, with the underlying revenue growth of 20% being a record. They confirmed that the entire cost impact, including raw material, freight, and currency depreciation, has been recovered through pricing actions. The company is confident in its ability to manage commodity cycles and recover prices proactively.

Investments in new technologies and customer acquisition infrastructure are aligned with the strategy to grow Beauty & Cosmetics. The company is seeing strong performance in its core Oral Care category and significant growth opportunities in Beauty & Cosmetics, with a target to double market share.

For Europe, while revenue growth is strong, operational challenges are being addressed, and margins are expected to recover to mid-teens. The company also clarified that the reported revenue growth includes pricing impact, and underlying business performance is strong.

Regarding taxation, the effective tax rate is expected to be between 18% and 22% for the full year.