EPL Ltd - Q1FY22 First Cut - ICICI Direct

(CMP: Rs. 245; MCap: Rs. 7722 crore)

EPL reported an operationally muted performance in Q1FY22 wherein the topline growth was slowed largely by the EAP and Europe regions (contributes ~50% in total topline). Higher other expenses dragged the EBITDA margin.

Q1FY22 Earnings Summary

- Consolidated revenue grew albeit at a slower rate of ~8% YoY to Rs. 799 crore in Q1FY22 mainly dragged by ~10% YoY drop in revenue from Europe regions to Rs. 178 crore. The revenue growth in the EAP regions was also lower at 2% YoY in Q1FY22 to Rs. 206 crore mainly due to higher base of Q1FY21 (where revenues were up by 45%). However, revenue from AMESA regions was higher by ~29% to Rs. 282 crore which led the consolidated revenue growth for Q1FY22

- On the margin front, while gross margin was flat on a YoY basis (up ~100 bps QoQ), the EBITDA margin declined by 164 bps YoY to 18.1% led by higher other expenses (up by 230 bps YoY)

- Interest cost continued decline by ~45% YoY resulting a flat PBT of Rs. 79 crore YoY. However, the PAT growth at ~32% YoY to Rs. 60 crore was largely due to favourable base (one-time exceptional loss of Rs. 16 crore in base period)

The company has continuously focused on reduction of debt resulting in significant savings in interest outgo. However, company is facing margin pressure from the last two quarters mainly due to low operating leverage. We await management commentary on future growth outlook across the regions along with margin guidance. The detailed report will be released post conference call.

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Source : Equity Bulls

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