/** Title: EPL Limited: Beauty and Cosmetics momentum lifts FY26, even as input inflation returns */

EPL Limited: Beauty and Cosmetics momentum lifts FY26, even as input inflation returns

EPL Limited ended FY26 with a strong quarter and a stronger full year, driven by broad-based growth across regions and a sustained step-up in its Beauty and Cosmetics franchise. In Q4 FY26, consolidated revenue from operations rose to INR 13,005 million, up 17.6% year on year. EBITDA grew to INR 2,632 million and the company held EBITDA margin at 20.2%, marking the seventh consecutive quarter of 20% plus margins.

Profit growth in the quarter, however, did not match the pace of topline expansion. PAT excluding exceptional items increased just 1% to INR 1,191 million. Management attributed the slower PAT growth to forex movements and tax phasing, noting that the quarter saw an INR 104 million forex loss versus an INR 34 million forex gain in the prior year quarter. On a full-year basis, the picture was cleaner: FY26 revenue reached INR 47,631 million, up 13.0%, EBITDA rose 15.8% to INR 9,724 million, and PAT excluding exceptional items increased 15.0% to INR 4,171 million. ROCE improved to 19.0% from 18.0% in FY25.

A quarter powered by category mix and execution

EPL’s growth narrative is increasingly tied to its portfolio shift. The investor presentation reported that Personal Care and Beyond now accounts for 53% of tube revenue, up from 48% in FY25 and 43% in FY19. The company defines Personal Care and Beyond to include Beauty and Cosmetics, Pharma, and other non-oral categories.

For Q4 FY26, the company disclosed a tube revenue split of Oral Care 47%, Beauty and Cosmetics 40%, Pharma 4%, and Others 9%. Management highlighted that Beauty and Cosmetics delivered a record 30% year-on-year growth in the quarter, aligning with its strategic focus to reduce reliance on Oral Care and build a second large growth engine. Oral Care also showed recovery, growing 10% year on year in the quarter, according to management commentary.

In the conference call, the Managing Director described the Q4 growth as the “highest ever revenue growth in the last 5 years” and stressed it was not driven by one-offs such as tariff-related inventory pushes or the later-stage impact of the Middle East crisis. Instead, the company credited its strategy execution in Beauty and Cosmetics, combined with an improving trend in Oral Care.

Financial summary (Consolidated)

Note: EBITDA in the presentation is shown excluding forex gain or loss.

Regional performance: Americas strong, Europe still the weak link

Growth in Q4 FY26 was described as double-digit across all regions in the presentation, with management also confirming broad-based momentum on the call. The deck reported Q4 revenue growth by region as AMESA 10.4%, India 11.5%, EAP 25.0%, Americas 24.1%, and Europe 15.5%.

A closer look at profitability shows meaningful divergence.

Americas delivered one of the strongest improvements. In Q4 FY26, Americas revenue rose to INR 3,778 million and EBITDA increased to INR 820 million, lifting EBITDA margin to 21.7% from 19.0% a year ago. For FY26, Americas EBITDA margin improved to 20.5% from 18.1% in FY25.

EAP also showed strength, with Q4 FY26 EBITDA margin at 21.4% and FY26 margin at 22.1%. During the call, management clarified that the strong Q4 EAP performance was driven primarily by China, not Thailand. The Thailand greenfield facility was commissioned in November and remains in customer validation and certification stages.

Europe remains the clear area of pressure. In Q4 FY26, Europe revenue increased to INR 3,115 million but EBITDA declined to INR 443 million, taking margin down to 14.2% from 17.2% in the prior year quarter. For FY26, Europe EBITDA margin was 14.5% versus 16.6% in FY25. Management said Europe margins improved versus previous quarters due to operating efficiency and are likely to continue improving.

AMESA’s Q4 profitability was softer year on year, with EBITDA margin declining to 17.4% from 19.0%. On the call, management attributed this to one-offs including CEO transition costs, and also said the base quarter included a phasing benefit. For the full year, AMESA margin improved slightly to 18.7% from 18.5%.

Input inflation returns: Middle East crisis and the pass-through test

A central theme in the presentation and call was the impact of the Middle East crisis on raw material availability and pricing. The deck highlighted sharp quarter-on-quarter spikes in key inputs versus Q3 FY26, including a 71% surge in C6 and C8 polymers, a 40% surge in C4 polymers, and a 52% surge in aluminium foil.

Management emphasized two priorities: secure supply, then protect profitability through pricing. The Managing Director said the company had secured raw material availability till at least mid-July and is extending coverage weekly. On pricing, the company stated that nearly 50% of its business is under contractual pass-through arrangements and, in the call, management said over 50% is covered under contractual structures. The CEO described EPL’s current approach as more advanced than during the earlier inflation cycle, noting a landed cost plus power pass-through model and proactive price increase actions for non-contractual customers.

The company did not quantify a blended global inflation number, stating that pricing and availability vary by region and are changing week by week.

Capex, sustainability, and the innovation push behind Beauty and Cosmetics

EPL’s FY26 capex increased to INR 4,815 million from INR 3,631 million in FY25. During the call, the CFO said the capex was largely driven by Beauty and Cosmetics investments and reiterated that while capex is expected to be closer to depreciation over time, the company will invest ahead of the curve when demand and market-share opportunities justify it. The CFO also noted that some large equipment was capitalized in Q4, contributing to higher depreciation.

Sustainability continues to be positioned as a competitive advantage. The deck stated recyclable volumes increased from 10% in FY23 to 38% in FY26, and that more than one-third of the portfolio now comprises sustainable tubes. Management also said sustainable tube formats contributed 38% of total sales in the quarter.

The company highlighted multiple recognitions, including an EcoVadis Platinum rating, placing it in the top 1% globally, and certifications as a Great Place to Work across seven countries.

Indovida merger: a scale leap, with process timelines and dividend impact

The most significant corporate update was the proposed merger with Indovida. Management described it as a transformational move that would create a nearly USD 1 billion consumer packaging platform, broaden the product portfolio, strengthen manufacturing and innovation capabilities, and expand presence in emerging markets, while being margin and value accretive.

The CFO stated that dividend was not declared due to the merger process. Management guided that the merger could take about 12 months from the end-March announcement, with a possible completion by Q4 FY27, subject to multiple approvals.

What to watch from here

EPL reiterated long-term guidance of low double-digit revenue growth in the 11% to 13% range. The company’s near-term operating story will likely hinge on three variables.

First is the sustainability of Beauty and Cosmetics growth at scale. Management believes there is strong headroom supported by investments in capacity, innovation, and participation in extrusion solutions.

Second is how quickly Thailand ramps from validation to meaningful volumes. Management said volumes should start in the next couple of quarters and then scale gradually.

Third is the durability of 20% plus margins as raw material inflation resurfaces. Management was clear on its intent to fully pass through costs without lag and to protect absolute EBITDA growth, but the environment remains volatile.

For investors, FY26 reinforced that EPL’s mix shift is real and measurable. The company closed the year with stronger ROCE, low leverage, and a clear playbook for growth. The next phase adds a new variable: execution through a volatile input cycle while preparing for a large merger integration.