Ladies and gentlemen, good day and welcome to the EPL Limited Q1 FY 2026 Annual Conference Call hosted by Systematics Group . As a reminder, all participants will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please give me an update call by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pratik Tholiya from Systematics Group for his opening remarks. Thank you and over to you, sir.
Yeah, thanks, Ms. Khanh. Good evening, everyone. On behalf of Systematics Institutional Equities, I would like to welcome all the participants who have logged into this conference call of EPL Limited to discuss the first quarter results. From the management side, we have Mr. Anand Kripalu, MD and Global CEO; Mr. M. R. Ramasamy, COO; Mr. Deepak Goyal, CFO; Mr. Srihari Rao, President and Interim Head; Mr. Onkar Ghangurde, Head Digital Commerce Team at the [Bank of Utah]. We also would like to thank the management for giving us the opportunity to host this call. I would now like to welcome Mr. Anand Kripalu to start the proceedings. Thank you and over to you, sir.
Thank you very much, Pratik, and hello, everybody. It's very good to be with you. Thank you for joining us for EPL Quarter One FY 2026 Earnings Call. I'm delighted to share that we have had a strong start to the financial year with solid progress across all our key metrics. We have delivered double-digit revenue growth of 10%, robust EBITDA growth of 18.1%, and very strong CAC growth of 55.8%. Our EBITDA margin has expanded to 20.5%, improving by 140 basis points over the previous year. We delivered an ROC of 18.9%, improving by 299 basis points as compared to last year. This performance is a result of consistent execution, clear strategic direction, and operational discipline. Our consolidated revenue grew 10%, driven by strong double-digit growth in three of our core regions.
Europe grew by 15%, Americas by 13%, and TLD by a solid 10% through effective execution and robust duty and cost metrics growth. Americas' growth, however, was modest at 1.7% amidst macroeconomic headwinds and sluggish FMCG demand. We had another quarter of very strong duty and cost metrics performance with 35% year-on-year growth, reflecting the continued success of our strategic focus on this category. EBITDA margin expanded to 20.5%, delivering a robust growth of 18.1% versus the previous year. This represents the 12th consecutive quarter of margin expansion, underpinned by sustained double-digit EBITDA growth and four successive quarters of 20%+ margins. Europe and the Americas delivered significant margin improvement, driven by strategic interventions and structural cost actions. Americas and TLD continued to operate within the target margin range, supported by disciplined execution.
Underlying CAC grew 55.8% during the quarter, and its EPS improved from INR 2.02 per share in Q1 FY 2025 to INR 3.13 per share this quarter. Strong EBITDA and CAC performance, combined with solid cash flow generation, have helped improve our net debt-to-EBITDA ratio to 0.45x, with the ROC improving to 18.9%. Sustainability remains central to our growth agenda. This quarter, sustainable PUC formats contributed 38% of total sales, reflecting growing customer adoption and the impact of our product innovation efforts. EPL Limited received the topmost EV rating in the Supply and Engagement Rating category by PDC, making this the third consecutive year the company has retained this distinction in the category, a testament to our consistent leadership in driving sustainability across the entire value chain.
As a result, we have plans in place to build and sustain double-digit revenue growth with strong operating margins through focused execution combined with strategic clarity. Our priorities remain: one, strong momentum in beauty and cosmetics. We are seeing continued success in our beauty and cosmetics segments with strong double-digit growth. NEOSeam continues to gain traction for its seamless finish, while other printing and investments in exterior tubes are further strengthening our offering. As overall growth gradually comes back over the next quarter, high growth momentum in this segment will help us deliver sustained overall double-digit revenue growth. Second, scaling presence in high-growth markets. We are scaling up well in high-growth markets with the Brazil capacity expansion now live and delivering ahead of plan. This not only strengthens service to our key accounts but has also enabled us to add several new customers in the region.
The Thailand Greenfield is progressing as per timelines and will start contributing in the second half of the year. Third, sustainability as a commercial differentiator. Our sustainable tube mix has risen to 38%, driven by close collaboration with customers to co-develop recyclable and PUC formats. This is helping us gain volumes and strengthens our position in competitive bids. We see continued momentum here with further tailwinds expected as large brands accelerate their sustainability commitments. Finally, the fourth, margin expansion and improved capital efficiency. We are seeing encouraging momentum on margins across regions. Americas and Europe continue to benefit from building the right structure along with focused execution, better product mix, and cost actions. We have already mitigated the impact of earlier U.S. tariffs and are now evaluating the implications of the recent one. Importantly, we manufacture in the U.S. to sell in the U.S.
While we import laminate into the U.S. with contractual pass-through arrangements in place, we expect the impact to be immaterial. In India, despite macroeconomic headwinds, margins remain strong. The business is now back within the target margin range, supported by steady operational improvements and sharper commercial focus. At the same time, we are maintaining strict discipline on capital allocation, interest costs, and working capital. This approach is helping us improve returns as well as efficiency. As a result, we are well poised to deliver fast growth ahead of revenue and further improve ROC in the foreseeable future. We are very pleased with the strong start to the year and the momentum across our priorities. With disciplined execution, customer focus, and a clear strategy, we are well positioned to deliver consistent growth so as to create long-term value for all our stakeholders.
With that, we will now open up the line for questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are instructed to use handsets while asking a question. Ladies and gentlemen, please wait for a moment while the question queue is ending. The first question is from the line of Sameer Gupta from India Info Line. Please go ahead.
Hi. Good evening and thanks for taking my question. Firstly, sir, if I look at EPL, now growth has been subdued for four consecutive quarters. If I look at, you know, the FMCG companies, particularly in oral care, there, the weakness typically has started only from last quarter onwards. Also, last quarter, you mentioned that the growth was impacted here because of lower intercompany laminate sales. I just wanted to understand the weakness in EPL in terms of is it just oral care? Are there other factors? Going forward, when do you expect recovery? Any change which is visible on the ground currently?
As far as India is concerned, this quarter as well, our huge revenue growth is higher than the overall revenue growth that you are seeing, right? There is some amount of correction in terms of laminate inventory. More specifically, there has been a softness in oral care volumes. What has started happening is that we have seen accelerated momentum in beauty and cosmetics, right? That is helping our overall numbers. Now, oral, the way we see it, I think we are beginning to see some signs already of recovery of oral volumes. As oral volumes are coming back with sustained beauty and cosmetic momentum, for which we have put in a lot of effort and we are seeing the result, when that starts happening, we should start seeing overall growth numbers beginning to improve.
Got it, sir. When do you expect, Anand , in terms of oral care, to start clocking respectable growth in terms of, let's say, mid to high single-digit kind of a number?
The indication we have from our key customers is that they are seeing some recoveries. H2 is the expenses of that bouncing back, okay? If I were to just read that, marry that with our accelerated momentum on DMC, I think that's when we should begin to start seeing improved numbers. While I answer this question to you, I just want to say this, that we know that there has been some softness in the overall FMCG environment in India. I think the strength of our portfolio is that we have delivered double-digit growth in three of the other regions. I think the strength of our portfolio is that we are able to manage one-off slowness that could happen anywhere in the world, with success in other parts of the world so that we overall deliver double-digit growth, which indeed we've done.
For me, the confidence is that our portfolio is coming to play, that we are not a victim of only some softness in one region, but we can still deliver the overall ambitions that we have for this business.
Got it, sir. That's very helpful. Just a bookkeeping question. Tax rate, again, this quarter has been on the lower side. Last year also was low. Any guidance that you can give as to what you expect for the full year ahead?
Yeah. As I've mentioned, the tax rate in the quarter could get impacted by the mix of profit in various countries. I expect a steady state net rate will continue to be in the 18%- 20% range. However, it can go up and down depending upon how the mix of the profits is coming.
Got it. This is still for the full year, you expect, and not for the remaining quarters?
The 18%- 20% number?
Yeah.
Yeah, I would say that, depending upon the mix in low-tax geographies, this year's tax rate could be a bit lower than the steady state rate. The steady state rate will be about 18%- 20%.
Got it, Deepak. That's helpful. I'll come back in with you for any follow-ups. Thanks and all the best.
Thank you.
Thank you. The next question is from the line of Sanjay Jain from ITI Securities. Please go ahead.
Hi, good evening, sir. Thanks for taking my question. I got the first question on the personal care. Very strong performance, 28% YOI growth on a decent base. Can you help us understand what is driving such a strong and sudden uptick in the growth for personal care? Do you think the run rate was sustainable at least for the next 12 months?
We have been talking about the efforts we are making as a business on beauty and cosmetics for India's personal care. We've been talking about it for the last year or so, right? Since then, I would say that the execution of our brand has now permeated across the organization and around the world. For instance, we have seen very aggressive customer acquisition. Our innovation is beginning to show results, particularly NEOSeam that we were talking about, okay? We have invested in people and, importantly, in backend capability, which is both to do with refinancing capacity as well as agility to deliver timelines for smaller MOQs, which are far better than what we ever were doing in the past, okay? Finally, I must tell you that we are also hungry today for M&A in the beauty and cosmetics space. We're actually hunting down opportunities in DMC around the world.
I think everything that we have put in gives me confidence that you will see a new momentum on beauty and cosmetics. Last quarter, we were about 20% growth. This quarter, in beauty and cosmetics, we have 35% of growth. I think you should continue to see solid momentum in beauty and cosmetics looking ahead.
When you say M&A, will it be going more into the non-laminate segment or will it be more geographical? How are we looking at M&A?
I mean, it could be both, honestly, Sanjay. It could be geographic, right? Regions where we are relatively under-indexed in terms of our shares, right? We can transform our business with the right kind of M&A. I would say selectively in markets which are predominantly excluded markets, we may look at excluded manufacturers as well. We will stay in the space of tubes. We will stay in the space of plastic tubes that could be laminated tubes or excluded tubes, all right? It's based on what's available. All I can tell you is that we have a strategic approach to scanning the market and zeroing in on opportunities. We've actually signed a few NDAs where we're doing some work to explore. Obviously, we will share more information when we are able to share that information.
I think the bigger message is that we've always said that DMC is the big growth opportunity for this business. DMC is where we have relatively low shares compared to oral care. Honestly, that is where a huge amount of management effort is going. Adding to that, we will also put money on the table if we have the right targets to acquire so that we can sustain strong beauty and cosmetics performance.
That's clear. On the Europe segment, I could understand Americas and Brazil adding to the growth. What's driving Europe growth so strong?
What is driving Europe growth so strong in the sense that, you know, we have seen some years of crummy performance in Europe, right? We've made certain key changes. We have put certain structural interventions in place. We have beefed up our sales resources. We actually have a new Head of Sales as well. I think all that put together is beginning to deliver value for the business, okay? Therefore, we are also exploring possibilities of M&A in Europe as well, right, to be able to actually see how things are positioned in Europe. I would just add, Anand saying, I think in Europe, our market share is relatively very small. Hence, our ability to gain market share with good service levels goes up significantly. Despite, let's say, inherent category growth, which may be slower than the global growth in Europe, opportunity for us remains very high.
The opportunity has always existed, right, Deepak?
Yeah. That is what Anand is mentioning, Sanjay, that we were not able to capitalize on that opportunity for two reasons. Number one, our profit structure, the P&L structure, was not optimal. Our margins were suboptimal. Hence, a lot of focus always went on fixing the cost base rather than growing the result. In second, some of the organizational level changes that we did last year. We have been able to fix both of those issues in the last 12 months- 15 months, and the results are showing in the numbers now.
That's perfect. One question, Anand, on your initial comment. You said that you have been in more labels. Can you give more color? How many more labels do you have on? How much? What is your contribution in the growth which is coming from the new customer? That would be helpful.
You're saying how much growth are we getting from new customers?
Yeah, yeah, because.
No, I don't have that. One of the drivers was running the.
Sorry?
That was one of the drivers for P&C growth, right?
Oh, that absolutely is one of the drivers. We are going after a large number of smaller customers, okay? If you look at just India, there's a table in front of me here with samples of tubes from all kinds of brands. A large number of them are D2C brands, online brands, right? I don't know. Do we have the number? Let's see. Sanjay?
I'm sorry to interrupt. The management line has been dropped. Please wait until we connect you to management. Oh, we have connected the line of management. Please go ahead.
Okay. Sanjay, can you hear us now?
Yeah, yeah, we can hear you. Thank you.
Yeah. Sanjay, today, beauty and cosmetics growth is driven through innovation across both the existing customers and new customers. As we are explaining and demonstrating our capabilities for existing customers, we are gaining new products from them. We are equally aggressively acquiring new customers. We don't have the number right now, but this is the growth which is driven by innovation. That is why our confidence in sustaining DMC growth, even in the future, remains high.
Got it. Got it. That's clear. I think these were my questions. Thanks for answering them so patiently and the success of the coming quarter.
Thank you.
Thank you. The next question is from the line of Smith Gala from RSPN Ventures. Please go ahead.
Yes, thank you for the opportunity. The first question was regarding the recent strategic investment by Indorama. I wanted to understand, will this investment be helping us collaborate with them on takeoff strategy?
I think the answer is yes. As an example, our Thailand project is done with a lot of support from Indorama. In fact, our unit is being set up on the Indorama premises, of course, with all the arm's-length checks and balances in place. That's how we are able to get off to, with great speed. We're also getting a lot of their support for getting all the licenses and approvals and so on and so forth that we need. That's a first example of where we have leveraged Indorama's resources. We are continuously exploring other opportunities around the world.
Okay, that was helpful. Secondly, just wanted to understand more on the top line and the EBITDA and the bottom line guidance.
What would you like to understand?
The double-digit growth of top line. Can it be bettered, or will we maintain that double-digit guidance of top line?
We have given a guidance to say that our ambition is to deliver double-digit growth with EBITDA growing faster than revenue and CAC growing faster than EBITDA, okay? That guidance phase is sort of quarter-to-quarter guidance, but in a kind of full-year guidance, okay? I think what I've been saying is that we've delivered double-digit growth in a quarter where MSR has been soft and Oral has generally been soft, right? We have seen long-term trends on Oral, right? You know this company has been built on Oral. We have seen long-term growth in Oral. Therefore, you know, toothpaste is not a category that disappears. People don't stop brushing, to put it simply. Therefore, some of those trends are short-term.
When those come back with the ambition, with the growth that we have been able to establish with beauty and cosmetics, we absolutely believe that we will be playing in the double-digit zone.
Okay. Thank you. That was helpful. That's all from my side.
Thank you.
Thank you. A reminder to the participants who may press star and one to ask questions. The next question is from the line of Pooja Jain from Trinetra Asset Management. Please go ahead.
Hello. Thank you for the opportunity. I have a follow-up question on Indorama's inflow test. What was the vision for getting this strategic investor on board? Will they be increasing their stake in the future or taking up a more active role?
I don't have a real answer to your latter question, honestly. The point is that a strategic investor will take a long-term view of a business. A private equity firm will have a five-year, six-year horizon. I think the purpose of a strategic investor is that decisions should be taken in the fullness of time to create long-term value for our stakeholders and to drive long-term transformational growth for this business. I'm convinced, but that was my understanding of the role of a strategic investor versus a private equity investor.
Okay. Understood. I also wanted to know, the Brazil Greenfield facility that had gone live last year, can you please tell me the update on its current utilization levels and how much it's contributing to the revenue?
As far as Brazil is concerned, I would say our utilization has been high. As a consequence of that, we have doubled our capacity in beauty and cosmetics in Brazil as we speak. That fully came on stream in June, and we have now started really accelerating our beauty and cosmetics business. I think you have got to believe that the utilization was high enough for us to take a decision to put another slug of investment into Brazil. Overall, I would say that we are delighted with our performance in Brazil, particularly since a lot of the growth momentum is coming in beauty and cosmetics in Brazil, and it's making a big difference to our overall global performance as well.
All right. That clears it up. That's all from my side. Thank you so much.
Thank you.
Thank you. A reminder to all the participants you may press star and one to ask questions. The next question is from the line of Anupam Jain from Indira Securities . Please go ahead.
Yeah, thanks for the opportunity.
We are going to the audience after lunch. Can you speak a little louder, please?
Yeah, is it audible?
Yes, sir.
My question is, what will be the contribution from Thailand capacity once it ramps up in H2?
We are not basically giving a number on that. All I will say is that the whole plan of Thailand is to actually start small but accelerate very fast, all right? The model in Thailand is a little different from our model of expansion to other geographies where it's been done on the back of a customer contract. In Thailand, we have a very strong pipeline of products, particularly in the beauty and cosmetics space. What we're doing is we're getting started quickly, and as the business comes in, our aim is to ramp up very fast. I would say that the contribution of Thailand will keep increasing, but we are not specifically giving a number on what we will contribute in H2.
Okay. More about then, how do you use Indorama's validity personal employee person that you are using in Thailand for that facility's for theater marketing? How will that be? Will you give me a specific guidance in that term?
We will have our own EPL team. We will take help and support from Indorama as needed. In areas needed, it could be by way of introductions to customers, support to get licenses done, and in other areas, maybe even hiring of people. Finally, EPL is a different entity from Indorama and will run an independent operation in Thailand.
Okay. Because what I'm gathering is, first, Thailand will open doors to new geographies if it is successful.
That is the advice we give there.
Significant part, yes. We're gathering the advice from that. I'm just trying to understand how your thinking comes again to the very small CapEx that you are doing currently.
Thailand itself is a very large market, where we have a very small share, and that is linked to whatever we export currently from China into Thailand. Having an onshore production allows us to access the beauty and cosmetics market that typically has larger labs and shorter lead time, which is stuff we go through an export model. Our first objective is to truly exploit the Thailand market, specifically in the area of beauty and cosmetics. You're absolutely right. Once we check our base in Thailand, suddenly Malaysia is more accessible, Vietnam is more accessible, Indonesia is more accessible. That's what I said when I said, "Start small, but accelerate fast." That's our thinking.
Okay. Thanks, guys. Let me see if it's the other question about the analytical objective. Thank you.
Thank you.
Thank you. A reminder to all the participants who may press star and one to ask questions. Participants may press star and one to ask questions. The next question is from the line of Anupam Jain from Indira Securities . Please go ahead.
Just one follow-up question on the M&A or the acquisition that you are thinking. What will the size of this?
Sure. The emerging acquisitions don't say that, right? All we are saying is that we have been hunting down opportunities in geographies where we believe it can help us in transforming our business. We are looking at what's available. I have said that we have already signed a couple of NDAs to have more detailed conversations with a few targeted parties. In terms of timing or scale, and whether it will happen or not happen, I don't think I'm in a position to comment. We will absolutely share that with you when we have made a decision. I just want you to recognize that we are driving the agenda for M&A as hard as we can. Ultimately, it's based on the opportunities available and the price at which you are willing to get it, okay? That is the whole point about M&A.
there any amount that you have earmarked for this business?
We've not earmarked an amount for this. All I will say is that, you know, as I've already said, our net debt-to-EBITDA ratio is 4.45. We have huge opportunity to leverage our balance sheet, and we would be ready for, you know, even a medium-sized or even a larger potential target because our balance sheet permits us to do so.
Thank you.
Thank you.
Thank you. The next question is from the line of [Mik from] . Please go ahead.
Hi, sir. It's a good question. First of all, what will the CTEC outstanding amount be spending on Thailand facilities?
Hello.
Hi. It's about, you know, like I said, we're starting small, right? We accelerate fast. It's roughly in the zone of about $1 million to start with, in at least a fifth of a year, right? The plan is as business comes in, we will accelerate when cost.
Understood. What kind of margin profile can we see in these operations in the Thailand geographies?
Margin will be equal to or slightly better than the global market.
Okay. One more thing is that the Thailand market, as you already mentioned, is a very big market. As you know, Indorama is also a very big player in that location, right? What will be a competitive challenge to Indorama incubating another player in that location? How will it impact management in the Thailand region?
There is no competition with Indorama. They are not operating in the categories that we are operating in, which is primarily growth plastic tube. There is absolutely no competition. If anything, there are opportunities for synergy rather than parity.
Okay. Apart from Thailand, any major CapEx plans in the near geography are you planning, except for Brazil as you mentioned? You're thinking about the capacity in Brazil. Any other in the U.S., India, or Europe? You're planning any CapEx plans soon?
CapEx is part of the operating model. We have been maintaining that our CapEx investments every year will be roughly equal to our depreciation, which is anywhere between INR 350 crore-INR 400 crore. A large part of this CapEx expense goes into growth CapEx. We produce more than 8 billion tubes a year, and when we are growing volumes in high single digits, we are adding volumes which are larger than most players in this market, right? Hence, to deliver to this volume, we continuously keep doing growth CapEx. We are mentioning the ones which are specifically into growth geographies like Brazil and Thailand. However, other than that, the normal expansion CapEx is happening across geographies.
Got it. Okay. Thank you so much.
Thank you.
Thank you. A reminder to all the participants who may press star and one to ask questions. Participants may press star and one to ask a question. If there are no further questions from the participants, I'll hand the contents over to Mr. Pratik Cholya for his closing comments. Over to you, sir.
Yes. Thank you, Khanh. On behalf of Systematics Institutional Equities, I'd like to thank all the participants for allowing me to this call. I would like to also thank the management once again for giving us the opportunity. I would like to request Anand Kripalu as any closing comments from you.
No, I just want to thank you, really, and thank all the participants for your continued interest in EPL . Thank you for joining us.
Thank you so much, sir.
Thank you. On behalf of Systematics Group, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thanks, thanks.