The company’s consolidated revenue from operations grew 6.9 per cent to Rs 731 crore from Rs 684 crore in the corresponding quarter of previous fiscal. Consolidated net profit, too, jumped by 49 per cent YoY at Rs 79.6 crore as against Rs 53.4 crore in the year ago quarter.
Following the results, on November 11, rating agency India Rating & Research (Ind-Ra) affirmed Essel Propack's long term issuer rating as "IND AA" (resolving rating watch evolving (RWE)). The outlook was also changed from "stable" to "positive".
“The positive Outlook reflects continued product, geographical and customer diversification achieved by Essel Propack
while enhancing the business profile as a strategic partner in the customers’ value chain, and improved financial flexibility post the acquisition by a fund managed by the Blackstone Group,” Ind-Ra said in a press release.
The positive outlook also factors in the likelihood of an improvement in the operating margins owing to the evolving product mix, with a near-term target of about 50 per cent revenue share from the higher-margin non-oral category (renamed as the personal care segment; Q2FY20: 46 per cent; FY19: 42 per cent), it said.
Ind-Ra expects margins to remain between 18 per cent and 20 per cent in the medium term. The rating agency expects the credit metrics to remain strong over FY20, driven by healthy operating profitability and the company’s less-aggressive debt-led capex policy.