Motilal Oswal Initiates Buy Rating on EPL with Target Price of Rs 270

EPL and Indovida Sign Definitive Agreements to Merge, Creating a $1 Billion Revenue Entity

Motilal Oswal's research report highlights a significant development in the consumer packaging industry, as EPL and Indovida, a subsidiary of Indorama Ventures Ltd, have entered into definitive agreements to merge. The transaction will result in the creation of a $1 billion revenue entity with a combined valuation of $2 billion. This merger will form one of the largest consumer packaging platforms in emerging markets, allowing the combined entity to expand its global reach, accelerate growth, and enhance margins and returns.

Indovida: A Leading Global Rigid PET Packaging Platform

Indovida is a prominent global rigid PET packaging company with 19 facilities across nine countries, primarily located in Southeast Asia and Africa. The company derives approximately 90% of its revenue from emerging markets and operates mainly in preforms, which account for about 75% of its revenue. Indovida's strong customer relationships, driven by high service quality, experienced management, reliable raw material access, and a diversified geographic footprint, have contributed to its success.

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Valuation and Outlook

As part of the merger, EPL is valued at approximately $1.2 billion, representing a 70% premium to its closing price on March 26, 2026. Indovida India, on the other hand, is valued at approximately $700 million, which is a 35% discount to EPL's multiple. In terms of valuation multiples, EPL is trading at approximately 10.3x FY28E EPS of INR19.9 and 5x FY28E EV/EBITDA. Motilal Oswal values the stock at 14x FY28E EPS, arriving at a target price of INR270. The research firm reiterates its BUY rating on the stock.