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Motilal Oswal Report
EPL Ltd. reported a weak operating performance in Q2 FY22, despite a demand recovery, due to volatile input cost, higher freight cost, and pressure on supply-chains.
Revenue rose 13% YoY to Rs 8.7 billion (our estimate: Rs 8.7 billion), led by a strong performance from Africa, Middle East and South Asia Region, East Asia Pacific and Americas.
Ebitda margin contracted by 330 basis points YoY to 18.3% (our estimate: 21.9%) on higher raw material cost and other expense. Ebitda stood at Rs 1.6 billion (down 4.1% YoY).
Adjusted profit after tax fell 24% YoY to Rs 507 million (our estimate: Rs 885 million).
Factoring in its Q2 FY22 performance, we decrease our FY22E/FY23E earnings estimate of EPL by 20%/8% due to higher raw material prices and expenses on account of increased freight cost and supply-chain disruption.
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