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EPL Ltd.: One off events drag profitablity

News: EPL’s consolidated revenues increased by 13% YoY led by revenue growth in the AMERICAS and AMESA regions by ~22% and 19% YoY respectively. However, Europe revenues were declined by 3% YoY to Rs.188 crore. The EBITDA margin declined by 165 bps YoY to 18.3%. This along with one time losses from JV/associates resulted, PAT decline of 23% YoY to Rs.53 crore.

Views: EPL has reported a muted performance in Q2FY22 on the profitability front mainly due to muted performance in the Europe regions. We believe the European regions performance was hit by scaling down the business operations in this regions. While management guidance suggests strong business recovery, going forward, we believe EPL’s re-rating will be possible with secular growth across regions.