Understanding the Current Rating
The 'Hold' rating assigned to EPL Ltd indicates a balanced stance for investors, suggesting that the stock is fairly valued at present and may not offer significant upside or downside in the near term. This rating was established on 11 Nov 2025, when MarketsMOJO adjusted the company’s Mojo Score from 47 to 50, moving it from a 'Sell' to a 'Hold' grade. The current Mojo Score of 50.0 reflects a moderate outlook based on a comprehensive evaluation of multiple parameters.
Quality Assessment
As of 28 February 2026, EPL Ltd’s quality grade is classified as 'good'. This assessment is supported by the company’s strong ability to service its debt, with a low Debt to EBITDA ratio of 0.93 times, signalling prudent financial management and manageable leverage. Additionally, the company maintains a Return on Capital Employed (ROCE) of 16.9%, which is a healthy indicator of efficient capital utilisation relative to its peers in the packaging sector.
However, the company’s long-term growth has been modest, with net sales increasing at an annual rate of 8.98% and operating profit growing at 8.52% over the past five years. These figures suggest steady but unspectacular expansion, which contributes to the 'Hold' stance rather than a more bullish rating.
Valuation Perspective
Currently, EPL Ltd’s valuation is considered 'attractive'. The stock trades at an enterprise value to capital employed ratio of 2.3, which is below the average historical valuations of its peer group. This discount indicates that the market is pricing the stock conservatively relative to its capital base. Furthermore, the company’s price-to-earnings-to-growth (PEG) ratio stands at 0.4, signalling that the stock may be undervalued relative to its earnings growth potential.
Despite this, investors should note that the company’s earnings per share (EPS) for the latest quarter is relatively low at Rs 2.55, and the debtors turnover ratio is at a five-year low of 5.39 times, which may reflect some operational challenges or slower collections.
Financial Trend Analysis
The financial trend for EPL Ltd is currently 'flat'. The company reported flat results in the December 2025 quarter, indicating a pause in growth momentum. While profits have risen by 39% over the past year, the stock’s total return over the same period is a moderate 7.04%. This divergence suggests that while profitability has improved, the market has not fully priced in this growth, possibly due to concerns about sustainability or broader sector headwinds.
Year-to-date, the stock has gained 0.93%, with a one-month return of 14.19% and a six-month decline of 6.48%. These mixed returns highlight some volatility and the need for investors to monitor ongoing performance closely.
Technical Outlook
From a technical standpoint, EPL Ltd is rated as 'mildly bearish'. The stock’s short-term price movements show some weakness, with a one-day decline of 0.21% and a one-week gain of 2.16%. This mild bearishness suggests that while the stock is not in a strong downtrend, it faces resistance levels that may limit near-term upside. Investors should consider technical signals alongside fundamental factors when making investment decisions.
Institutional Interest and Market Position
Institutional investors hold a significant 27.13% stake in EPL Ltd, reflecting confidence from well-resourced market participants who typically conduct thorough fundamental analysis. This level of institutional ownership can provide some stability to the stock price and indicates that the company remains on the radar of professional investors despite its modest growth profile.
Summary for Investors
In summary, EPL Ltd’s 'Hold' rating by MarketsMOJO reflects a balanced view of the company’s current prospects. The stock offers an attractive valuation and solid quality metrics, including strong debt servicing ability and efficient capital use. However, flat recent financial trends and a mildly bearish technical outlook temper enthusiasm. Investors should view the rating as a signal to maintain existing positions rather than aggressively accumulate or divest, while keeping a close eye on upcoming quarterly results and sector developments.
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Looking Ahead
Investors considering EPL Ltd should weigh the company’s attractive valuation and solid quality against the flat financial trends and mild technical headwinds. The packaging sector remains competitive, and EPL’s modest growth rates suggest that while the company is stable, it may not deliver outsized returns in the near term. Monitoring institutional activity and quarterly earnings updates will be crucial to reassessing the stock’s outlook.
Final Thoughts
The 'Hold' rating serves as a prudent recommendation for investors seeking to maintain exposure to EPL Ltd without committing additional capital aggressively. It reflects a stock that is fairly priced given its current fundamentals and market conditions. For those with a longer investment horizon, the company’s steady debt management and reasonable valuation could provide a foundation for future growth, contingent on improved operational performance.
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