EPL Ltd — Q4 FY26 earnings call

Call held 30 Mar 2026

Management summary

EPL Limited announced a transformational share swap merger with Indovida India Private Limited, aiming to create a $1 billion revenue packaging leader focused on emerging markets. This strategic move is expected to yield a combined revenue of INR 8,300 crores and EBITDA of INR 1,750 crores, with significant synergies of $35-$50 million. The merger will substantially strengthen the balance sheet, reducing the net debt-to-EBITDA ratio to 0.25, and position the company for accelerated organic growth and M&A opportunities, despite current geopolitical and inflationary pressures.

Highlights

  • Merger with Indovida India Private Limited creates a $1 billion revenue packaging leader, expanding product portfolio and global presence.

  • The combined entity is projected to have INR 8,300 crores in revenue and INR 1,750 crores in EBITDA, with identified synergies of $35-$50 million annually.

  • The net debt-to-EBITDA ratio will significantly improve to 0.25 post-merger, from EPL's pre-merger 0.65, due to Indovida being net cash positive.

  • EPL has demonstrated strong financial performance with double-digit revenue growth and 20%+ EBITDA margins over the last three consecutive quarters.

  • Indovida brings an 8% volume CAGR over the last 5 years and strong positions in high-growth emerging markets like Southeast Asia and Africa.

Concerns

  • Geopolitical events, such as the Middle East crisis, and crude-related inflation are disrupting the supply chain, though management expects to pass on costs.

  • Indovida experienced weaker performance in CY25 due to unique weather patterns and tax policy changes in Vietnam, impacting growth and margins for that year.

Key financials

2 periods

Headline

  • Combined Revenue
    ₹8,300 Cr
  • Combined EBITDA
    ₹1,750 Cr
  • Indovida Revenue (2025)
    ₹3,800 Cr
  • Indovida EBITDA Margin (2025)
    21.3%
  • Indovida ROCE (2025)
    23.7%
  • Indovida PAT
    ₹410 Cr
  • Combined PAT
    ₹815 Cr
  • Indovida Volume CAGR (5 years)
    8%
  • EPL B&C Growth (last quarter)
    20%

LTM

  • EPL EBITDA
    ₹940 Cr

What they filed

Q1 FY27: revenue up 25.3%, net profit up 0.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,086 1,014 1,105 1,108 1,206 +11%1,149 +13%1,300 +18%1,388 +25%
EBITDA219 202 228 227 252 +15%230 +14%256 +12%261 +15%
Net profit88 94 116 101 106 +20%83 −12%103 −11%101 +0%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Debt 0.3× EBITDA
    As a result of this merger, our debt-to-EBITDA ratio will come down to 0.25, and therefore we will have significant investment ability.
  • M&A Indovida India Private Limited Merger · Announced

    To create a consumer packaging leader focused on emerging markets, expanding product portfolio and capabilities, wider global presence across emerging markets and stronger financial metrics.

    Merger will create a $1 billion revenue packaging powerhouse with combined revenue of INR 8,300 crores and EBITDA of INR 1,750 crores. It is EBIT margin, EPS and ROCE accretive to EPL. Synergies of $35-$50 million identified.

    Today, I'm excited to share that we've taken a foundational step towards our vision by entering into definitive agreements for the merger of EPL and Indovida to create a consumer packaging leader focused on emerging markets. This merger will create a $1 billion revenue packaging powerhouse with expanded product portfolio and capabilities, wider global presence across emerging markets and stronger financial metrics.
  • Liquidity Liquidity disclosed The combined entity will have a significant war chest that can be deployed for organic growth and M&A.
    Indovida is a net cash company and along with EPL's strong balance sheet, this will create a significant war chest that we can deploy for organic growth and M&A.

Guidance & targets

Profitability

  • Synergies Profitability · annual · High confidence $35-$50 million
    We've identified synergies of~$35 million to $50 million across geographical footprint, product capabilities and costs, which will drive an EBITDA upside over the next few years.

    — Hemant Bakshi

Debt

  • Net Debt to EBITDA Ratio Debt · post-merger · High confidence 0.25

    Previously 0.65 → 0.25

    As a result of this merger, our debt-to-EBITDA ratio will come down to 0.25, and therefore we will have significant investment ability.

    — Hemant Bakshi

Merger Timeline

  • Merger Completion Merger Timeline · future · High confidence ~12 months
    Completion of merger process is subject to regulatory approvals and is expected to take approximately 12 months.

    — Hemant Bakshi

Market Expansion

  • Indovida New Market Entry Market Expansion · future · High confidence Morocco and Algeria
    They are looking at an opportunity of entering Morocco and Algeria.

    — Hemant Bakshi

Market context

  • EPL Revenue Growth Revenue · future · High confidence Double-digit
    Our guidance on EPL remains unchanged of double-digit revenue growth in the future.

    — Hemant Bakshi

What to watch in Q1 FY27

Merger Completion & Regulatory Approvals

Within 12 months
Current Definitive agreements entered, pending regulatory approvals.
Target Regulatory approvals obtained, merger closed.

Why it matters

Merger completion is essential for the combined entity to operate and realize the projected synergies and strategic benefits.

Completion of merger process is subject to regulatory approvals and is expected to take approximately 12 months.

Risks & concerns

  • Geopolitical supply chain disruption

    medium

    The Middle East crisis and geopolitical events are disrupting the supply chain, requiring agile management to secure supplies.

    Management acknowledged

  • Crude-related inflation

    medium

    Raw material costs are increasing due to crude inflation, but management expects to pass these costs through to customers.

    Management acknowledged

  • Indovida's weaker CY25 performance

    low

    Indovida's CY25 performance was impacted by unique weather patterns and tax policy changes in Vietnam, but management emphasizes its long-term 8% volume CAGR.

    Analyst downplayed

Q&A highlights

7 direct
Board composition post-merger Direct
what's been agreed is that Indorama will have at least three Board seats. Blackstone will retain a single Board seat and rest of the independent directors, etc, will be based on the regulations and the laws of the country.

Clarifies the new governance structure and representation of key shareholders on the Board of the merged entity.

Asked by Sanjesh Jain

Capital allocation and dividend policy post-merger Direct
inorganic opportunities will remain an important part of our strategy. We've set very clear criteria on how we will approach this. The first is that we want to leverage any opportunity which gets us into a new geography or helps us build a new capability in a new format. And of course, it must be margin accretive... Any future dividend policy will be decided by the Board.

Outlines the strategic priorities for deploying the strengthened balance sheet and clarifies that dividend policy will be a Board decision.

Asked by Sanjesh Jain

Leveraging geographical presence and synergies Direct
Now the same opportunity will become more accessible to us in markets where Indovida exists today. For example, Vietnam in Southeast Asia, big growing market. Indovida has a strong presence. EPL is not present there. It's an attractive market for us... For Indovida, there are markets in which EPL is present, like India, China, Latin America, and they can enter these markets by leveraging our presence here.

Explains how the combined entity will cross-leverage existing footprints and enter new markets more effectively, driving growth.

Asked by Sanjesh Jain

Indovida's business moats and new product categories Direct
they have really set up a strong customer relationships based on superior service... they work very, very efficiently with a high-quality management team... they have access to raw material and they built the ability to operate in difficult frontier markets... We will leverage the technology and capabilities they have built both for bottles as well as tubes. So that is an interesting area for us. The other area which we are very interested in and so are they is really rigid custom containers.

Provides insight into Indovida's competitive advantages and identifies specific new product categories (specialty caps/closures, rigid custom containers) the combined entity will pursue.

Asked by Mihir Shah

Valuation difference between EPL and Indovida Partial
the valuation and the way the experts have looked at it is premium on account of very good performance of EPL and a significantly higher potential... I think our move into B&C has really helped us get that premium.

Addresses analyst's concern about Indovida's lower valuation multiple despite strong metrics, attributing EPL's premium to its performance and strategic pivot.

Asked by Sameer Gupta

Shareholder approval for the merger Direct
this transaction is being done through a share swap and a scheme of amalgamation and hence there would not be an open offer... It will go into SEBI approval, then NCLT and then it will also go through the shareholder approval process... Yes, majority of minority. I mean we will need to get that approval.

Clarifies the regulatory and shareholder approval process, confirming the requirement for 'majority of minority' approval, which is a key investor protection.

Asked by Sameer Gupta

Indorama's debt and its impact on EPL Direct
Indovida today is also IVL subsidiary and it still manages net cash position and it's not leveraged... on the combined entity also, we do not expect to take incremental debt and pay a lot of dividends. We will continue with our dividend policy as we are doing now.

Reassures investors that the parent company's debt will not negatively impact the combined entity's balance sheet or capital allocation strategy, as Indovida itself is debt-free.

Asked by Pratham Kankariya

Sustainability of 20%+ margin given crude inflation Direct
Our cost inflation is passed through to our customers and that is something which we are already discussing with them... Probably if you look at the overall period of 4-5 months that we should be doing well, really well. There is no risk on the margin.

Provides management's strategy for mitigating raw material price volatility and maintaining profitability, indicating confidence in margin sustainability.

Asked by Kirthi K. Jain

2 min read 5 chapters

Detailed narrative

Transformational Merger with Indovida India Private Limited

EPL Limited announced a significant share swap merger with Indovida India Private Limited, a global leader in rigid packaging and a subsidiary of Indorama Ventures Group. This merger is set to create a $1 billion revenue packaging powerhouse, combining EPL's flexible packaging expertise with Indovida's rigid packaging capabilities. The transaction is cash-neutral for EPL and is expected to be completed within approximately 12 months, pending regulatory approvals.

Strong Financial Outlook and Synergies

The combined entity is projected to achieve INR 8,300 crores in revenue and INR 1,750 crores in EBITDA, making it EBIT margin, EPS, and ROCE accretive to EPL. Management has identified substantial synergies ranging from $35 million to $50 million annually, stemming from geographical footprint expansion, enhanced product capabilities, and cost efficiencies. These synergies are expected to drive significant EBITDA upside over the next few years.

Strengthened Balance Sheet and Capital Allocation Strategy

Post-merger, the combined entity's net debt-to-EBITDA ratio is expected to significantly improve to 0.25, down from EPL's pre-merger 0.65, primarily due to Indovida being a net cash positive company. This strengthened balance sheet will provide a 'significant war chest' for future organic growth and M&A opportunities. The new Board, which will include at least three members from IVL and one from Blackstone, will determine the future capital allocation and dividend distribution policies.

Strategic Market Focus and Growth Drivers

The merger aligns with EPL's vision to become a leader in consumer packaging for emerging markets, with 75% of the combined revenue coming from high-growth regions in Asia, Africa, and Latin America. Indovida's strong presence in markets like Vietnam and Nigeria, where EPL is not present, offers significant cross-leverage opportunities. The combined entity also plans to enter new markets like Indonesia and expand into new product categories such as specialty caps/closures and rigid custom containers.

Operational Resilience Amidst External Challenges

Management acknowledged challenges such as the Middle East crisis and crude-related inflation, which are disrupting supply chains and increasing raw material costs. However, they expressed confidence in their ability to pass on these cost increases to customers, ensuring margin sustainability. EPL has consistently delivered double-digit revenue growth and 20%+ EBITDA margins, while Indovida has shown an 8% volume CAGR over the last five years, demonstrating operational resilience.

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